JBIC Annual Report 2013
1Profile of JBIC
1 Message from the Governor 2
2 Profile 4
3 JBIC’s Medium-Term Business Plan (FY2012–2014) 6
4 Outline of Operations in FY2012 12
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JBIC Annual Report 2013
Aswepublishthe2013AnnualReport,Iwouldliketoexpressmyheartfeltap-preciationforyourcontinuedunderstandingandsupportforouractivities.
Theglobaleconomyremainedsluggishduringtheearly-to-middlepartofFY2012amidthesovereigndebtcrisisinEurope,thefiscalproblemintheUnitedStates,andtheslowdowninemergingeconomies.ItthenbegantoshowsignsofgradualrecoverydueinlargeparttothemildrecoveryoftheU.S.economyandtheendoftheslowdownphaseofemergingeconomiesinthesecondhalfofFY2012.Theinternationaleconomicclimatesurrounding Japan,however,continuestoposemanychallengesforthecountry.Globalcompetitionfornaturalresourcesremainsfierceamidtheever-growingglobalpopulation.ItisvitalforJapantosecurestableaccesstoenergyandmineralresourcesasthisisdirectlylinkedtopeople'slives.Inthemanufacturingsectoraswellastheinfrastructuresector,whichisseeinggrowingdemandworldwide, Japanisfacingincreasingcompetitionaroundtheworldindevelopedanddevelopingcountriesalike.Additionally,achievingeco-nomicdevelopmentinharmonywithglobalenvironmentalsustainabilityhasnowcometobeseenasacommonglobalissue.Thus,thereisanincreasingneednotonlyforenvironmentalandsocialconsiderationsinindividualprojects,butalsoforprojectsconducivetoenvironmentalconservationandimprovement,including,amongothers,thoseseekingtocopewithglobalwarming.Moreover,astheworldeconomyisbecomingincreasinglyintegrated,globalfinancialandeconomiccrisescouldhaveamoresubstantialimpactontheJapaneseeconomythaneverbefore.
Amidthesevariouschangescurrentlyunderwayintheglobaleconomicenviron-ment, JBIC set off on a new start onApril 1, 2012as apolicy-based financialinstitution wholly owned by the Japanese government, pursuant to the JapanBankforInternationalCooperationAct(JBICAct).TheJBICActprovidesthatweatJBICshallconductoperationsinthefollowingfourfields,whilecomplement-ingthefinancialtransactionsofprivate-sectorfinancialinstitutions:(1)promotingtheoverseasdevelopmentandsecurementofresourceswhichareimportantforJapan;(2)maintainingandimprovingtheinternationalcompetitivenessofJapaneseindustries;(3)promotingtheoverseasbusinesshavingthepurposeofpreservingtheglobalenvironment,suchaspreventingglobalwarming;and(4)preventingdisruptionstointernationalfinancialorderortakingappropriatemeasureswithrespecttodamagescausedbysuchdisruption.ContributinginthiswaytothesounddevelopmentofJapanaswellastheinternationaleconomyandsocietyistheultimatemissionofJBICundertheJBICAct.Inthesefourfields,wehavebeenworkingactivelytoconductloan,guaranteeandequityparticipationoperations.
Message from the Governor1·
Profile of JBIC 1. M
essage from
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DuringFY2012,wefocusedon,amongotheractivities,promotingthedevelopmentandsecurementofenergyandnaturalresources.Forexample,wesupportedthedevelopmentofnaturalgasandLNGprojectsinAustralia,theacquisitionofinterestsincopperminesinChile,andtheimportofcrudeoilfromtheUnitedArabEmirateswithourfinancialinstruments.WealsofocusedonfacilitatingtheM&AofforeignfirmsbyJapanesecompaniesandsupportingexportsandstableoverseasopera-tionsbyJapanesemid-tierenterprisesaswellassmallandmediumenterprises.
DuringFY2012,wealsohelpedtomaintainandimprovetheinternationalcompeti-tivenessofJapanesecompanies.Foroverseasinfrastructuredevelopmentprojects,oursupportwasextendedtoprojectssuchasanintercityexpressrailwayprojectintheU.K.andarenewableenergypowergenerationprojectinCanada—eachofwhichinvolvedaJapanesecompanyplayingapivotalroleintheprojectasamajorparticipant.Wealsoassistedinacoal-firedpowerplantprojectinMorocco,aswellastheexportofequipmentandservicesfromJapanforanoilrefinerymod-ernizationprojectinKazakhstan.Furthermore,weassistedMyanmarinreturningtotheinternationalfinancialmarketbyextendingbridgeloanstotheGovernmentofMyanmartohelpclearthearrearsofpastloansfromtheAsianDevelopmentBankandtheWorldBankGroup(InternationalDevelopmentAssociation).Asaresultoftheseandotherfinancingoperations,thetotalamountofcommitmentswemadeduringFY2012inloans,guarantees,andequityparticipationsreachedJPY4,240.9billion.Thiswasanall-timehighsincetheestablishmentoftheJapanExport-ImportBank,thepredecessorofJBIC.
We,themanagementandstaffofJBICwillstrivetoexecuteourworkefficientlyasaunifiedbodyandliveuptotheexpectationsplacedonus,whiletakingcaretodevoteourselvestocomplementingprivate-sectorfinancialinstitutionsandensurefinancialsoundness.
Itismysincerewishthatourendeavorswillearnyourunderstandingandenduringsupport.
August2013HiroshiOkudaGovernorJapanBankforInternationalCooperation(JBIC)
Profile of JBIC 1. M
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Profile2·
As a policy-based financial institution, JBIC has the objective of contributing to the sound development of Japan and the international economy and society, while having the objective of supplementing the financial transactions implemented by private-sector financial institutions.
ProfileName JapanBankforInternationalCooperation(JBIC)Office 4-1,Ohtemachi1-chomeChiyoda-ku,Tokyo100-8144,JapanCapital ¥1,360.0billion(whollyownedbytheJapanesegovernment)Outstanding Loans and Equity Participations* ¥10,685.3billionOutstanding Guarantees* ¥2,400.6billion
Profile of JBIC 2. Pro
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Corporate Slogan
The Purpose of JBICJBICisapolicy-basedfinancialinstitutionwhollyownedbytheJapanesegovernment,whichhastheobjectiveofcontributingtothesounddevelopmentofJapanandtheinternationaleconomyandsociety,byconductingfinancialoperationinthefollowingfourfields:
Promoting the overseas development and securement of resources which are important for Japan Maintaining and improving the international competitiveness of Japanese industries Promoting the overseas business having the purpose of preserving the global environment, such as preventing global warming Preventing disruptions to international financial order or taking appropriate measures with respect to damages caused by such disruption
JBIC Corporate PhilosophyTheobjectiveofJBIC,assetforthinitsstatutorylaw,isto“contributetothesounddevelopmentofJapanandtheinternationaleconomyandsociety”byexecutingavarietyoffinancialfunctions.Topursuethisobjective,wehavesetoutthefollowingcor-poratephilosophy,whichespousesthreecorevalues:“Hands-onPolicy,”“Customer-1stApproach”and“Forward-lookingAction.”
Positioned at the crossroads of global business opportunities, JBIC is opening new venues to the future for the Japanese and global economy.
Hands-on Policy: Pioneeringnewvaluebyparticipatingattheforefrontofoverseasprojectdevelopment, andbyengagingproactivelyinprojectsfromtheearlystagesCustomer-1st Approach: Offeringcustomersone-of-a-kindsolutionsbyadoptingtheirperspectivesandintegratingtheirviewsinto policydevelopmentForward-looking Action: ContributingtothesustainabledevelopmentofJapanandtheworldasawholebydeployinghighlyprofessional skills,withaviewtorealizingasecureandaffluentfuturesociety
*AsofMarch31,2013
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Japan Bank for International Cooperation
(former JBIC)
October1999
Export-Import Bank of Japan (JEXIM)
International Financial Operations
Overseas Economic Cooperation Fund (OECF)
Overseas Economic Cooperation Operations
Japan Finance Corporation ( JFC)
October2008 April2012
JBIC (International Finance Units)
Operations to Facilitate Crisis Responses and Specific
Businesses Promotion, etc.
(Domestic Finance Units)
Micro Business and Individual Unit
Agriculture, Forestry, Fisheries and Food Business Unit
Small and Medium Enterprise (SME) Unit
Japan International Cooperation Agency ( JICA)
Japan Bank for International Cooperation
( JBIC)
HistoryJapanBankforInternationalCooperation(JBIC)wasestablishedonApril1,2012inaccordancewiththeJapanBankforInternationalCooperationAct(JBICAct),whichpromulgatedandcameintoeffectonMay2,2011.
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Operational PrinciplesJBIC,asapolicy-basedfinancialinstitutionandinaccordancewiththefollowingprinciples,conductsspeedyandwell-focusedoperationsbasedonpolicyneedsinresponsetoeconomicandfinancialsituationsinJapanandabroad.
1. Supplementing the financial transactions implemented by private-sector financial institutionsToeffectivelyperformthe functions required forpolicy-basedfinancing, JBICshall takeaccountofsituationswhereprivate-sectorfinancialinstitutionsareplacedintheirinternationalfinanceactivitiesandsupplementtheiroperations.
2. Ensuring financial soundness and certainty of repaymentPursuanttotheJBICAct,JBICshallmakeeffortstomaintainthefinancialsoundnessofitsoperations,andwhenmakingfinancialdecisions,toconductadequatescreeningregardingtheoutlookfortherecoveryoffunds.
3. Maintaining and improving international creditworthiness and confidenceInordertoconductadequateoperationsandeffectiveoverseasfundingoperations,JBICshallmaintainandimprovetheinternationalcreditworthinessandconfidencegainedbyJBICovertheyears.
4. Conducting business operations by drawing on its expertise and initiativesJBICshallconductoperationsbydrawingonitsownexpertiseandinitiativesoninternationalfinance.
Actconsistentlyinthepublicinterest.ContributetoJapanandtheinternationalcommunitybypursuingourMission. Prioritizeclientsatisfaction.Deliberate,decideandactfromtheclient'sperspective. Acceptresponsibilityasaprofessional.Performeverytaskbasedonyourowninitiative. Undertakechallengesdaringly.Createnewvaluewithoutfearoffailure. Workquicklyandcost-effectively.Enhanceyourworkqualitywithaneyetoefficiency. Focusonteamwork.Shareunifiedobjectiveswithyourcolleaguestoachievesignificantsuccesses. Maintainhighethicalstandardsandalaw-abidingspirit.ObserveourmoralcodeasaJBICmemberatalltimes.
JBIC Code of Conduct
December1950
March1961
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Realizingprojectsstrategicallywithoriginalvalueadded,whilebeingdeeplyinvolvedintheprojectformulationstage,therebycontributingtoeconomicgrowthinJapanandtheworld
Realizing sophisticated riskman-agementaswellasmaintainingandstrengtheningJBIC’sfinancialpositioninresponsetoincreasinglyhighrisk,long-termandlarge-scaleprojects
Identifyingpreciseneedsof Japa-nesefirmsandseekingtostrengthen“speedwithflexibility,” “expertise”and“negotiatingpower”toexecuterequisitepolicies
JBIC’s Mission
Positioned at the crossroads of global business opportunities, JBIC is opening new venues to the future for the Japanese and global economy.
Corporate Philosophy
Basic Principles of the Medium-Term Business Plan
Promoting overseas development and acquisition of resources
important for Japan
Maintaining and improving the international competitiveness of
Japanese industries
Promoting overseas business for preserving the global environment
Preventing disruptions to international financial order or to take appropriate measures with respect to damages caused by
such disruption
Contributing to the sound development of Japan and the international economic community
Hands-on PolicyPioneeringnewvaluebyparticipatingattheforefrontofoverseasprojectdevel-opment,andbyengagingproactivelyinprojectsfromtheearlystages
Customer‐1st ApproachOfferingcustomersone‐of‐a‐kindso-lutionsbyadoptingtheirperspectivesand integratingtheirviews intopolicydevelopment
Forward‐looking ActionContributingtothesustainabledevelopmentofJapanandtheworldasawholebydeploy-inghighlyprofessionalskills,withaviewtorealizingasecureandaffluentfuturesociety.
Operations
FinancesOrganization
JBIC’s Medium-Term Business Plan (FY2012-2014)3·
JBIC’s Mission, Corporate Philosophy and the Basic Principles of the Medium-Term Business Plan
Basic Principles, Backdrop and Overview
PlanofOperationalStrategyfor6ThematicAreasandBasicPrinciplesto8BasicStrategies,basedonfollowingJBICmissionandpolicy;1)Realizingprojectsstrategicallywithoriginalvalueadded,whilebeingdeeplyinvolvedintheprojectformulationstage,therebycontributingtoeconomicgrowthinJapanandtheworld,2)IdentifyingpreciseneedsofJapanesefirmsandseekingtostrengthen“speedwithflexibility,”“expertise”and“negotiatingpower”toexecuterequisitepolicies,3)Realizingsophisticated riskmanagementaswellasmaintainingandstrengtheningJBIC’sfinancialpositioninresponsetoincreas-inglyhighrisk,long-termandlarge-scaleprojects.
JBIC’scurrentMedium-TermBusinessPlan(FY2012-2014)aimstopromoteefficientandresults-orientedbusinessoperationsin linewith the Japanesegovernment’spoliciesand toac-complishproperaccountability.Tothisend,itexplicatedhighprioritybusinessandmanagement issues tobeaddressedbyJBICoverthemediumterm,andsetforthstrategiesandactionplanstotackletheseissues.JBICalsosetstheAnnualBusinessPlanforeachfiscalyeartosetspecifictargetsJBICshouldstrivetopursuethisyearwiththeactionplanssetintheMedium-TermBusinessPlan. JBICsetsthebasicprinciplesoftheMedium-TermBusiness
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Overview of the Medium-Term Business Plan FY2012-2014
Basic Principles (on Operations) and Their Backdrop
Realizingprojectsstrategicallywithoriginalvalueadded,whilebeingdeeplyinvolvedintheprojectformulationstage,therebycontributingtoeconomicgrowthinJapanandtheworld
Realizing sophisticated riskman-agementaswellasmaintainingandstrengtheningJBIC’sfinancialpositioninresponsetoincreasinglyhighrisk,long-termandlarge-scaleprojects
Identifyingpreciseneedsof Japa-nesefirmsandseekingtostrengthen“speedwithflexibility,” “expertise”and“negotiatingpower”toexecuterequisitepolicies
Operations
FinancesOrganization
Basic Principles
Operational Strategy for Each Thematic Area (6 Issues) Basic Strategies (8 Issues)
1 Supporting development and acquisition of overseas resources based on Japan’s natural resources policies
2 Supporting steadfastly the area of preserving the global environment
3 Supporting overseas development of infrastructure projects
4 Enhancing support for mid-tier enterprises and SMEs
5 Supporting strategic overseas business activities of Japanese firms
6 Preventing disruptions to financial order in the international economy or counteracting their adverse impact
7 Partnership with private financial institutions (Devotion to complementing private business operations)
8 Effective use of a variety of tools such as equity investment
9 Wielding negotiating power with external counterparties by leveraging JBIC’s status as a government-owned institution
10 Conducting speedy, flexible and efficient operations
11 Efforts to strengthen expertise in the organization
12 Self-disciplined corporate management
13 Managing risks commensurate with risk exposure of strategic operations
14 Maintaining appropriate profit levels and a stable fiscal position
Finances
Operations
Organization
Realizingprojectsstrategicallywithoriginalvalueadded,whilebeingdeeplyinvolvedintheprojectformulationstage,therebycontributingtoeconomicgrowthinJapanandtheworld
OperationsBasic Principles
Areaswhereactiveeffortsshouldbemadegoingforward Areaswhereeffortshavebeenmadetodate
Projectsupervision
Offering financing
Loanstructuring
Awardedconcession;orders
Competitivebidding
Studies for project feasibility
Dialogue with host country government
Consultation with potential Japanese project operations
Proactive involvement from the early stages of project formulation
Provide financing based on the business plan of the project operator
JBIC’sEfforts
Supporting standardization, etc.
Support financings
Policy dialogueBeing involved in
project formulation
Collecting Information Top sales
Supporting the formation of
consortiums
GovernmentEfforts:Examples
What is expected of the government for the overseas business development of infrastructure projects?
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IdentifyingpreciseneedsofJapanesefirmsandseekingtostrengthen“speedwithflex-ibility,”“expertise”and“negotiatingpower”toexecuterequisitepolicies
RealizingsophisticatedriskmanagementaswellasmaintainingandstrengtheningJBIC’sfinancialpositioninresponsetoincreasinglyhighrisk,long-termandlarge-scaleprojects
SetoutprinciplesguidingJBICoperationsoverthemediumtermtoeffectivelyexecutethemissionmandatedonJBIC,givenitsstatusasapolicy-basedfinancinginstitution.
DesignatestrategicissuesnecessarytoconductoperationsinaccordancewiththeBasicPrinciples.TheseconsistoftheBasicStrategies,whichsetoutmattersconcerningoperations,organizationandfinances,andOperationalStrate-giesforThematicAreas,whichsetoutanoperationalstrategyforeachthematicarea.
AssignedoverthemediumtermforeachoftheKeyStrategies.
Evaluatetheextenttowhichtheobjectiveofeachactionplanhasbeenachievedaswellasmonitorandevaluatetheprogressbeingmadeforeachactionplan.
Basic Principles
Key Strategies
Agendas and Action Plans
Performance Indicators
Indicator Definition Initial Assignment End Period Evaluation
QuantitativeIndicators
Setinitiallyquantitativeobjectivesfortheendoftheplannedyearandevaluatetheextenttowhichtheyareachievedattheendoftheplannedperiod.
Setquantitativeobjectives.Tabulatetheactuallyachievedfiguresandeval-uatethemquantitatively.*
MonitoringIndicators
Addupperformancefiguresattheendoftheplannedperiodandmonitortheirchronologicalchanges.
Tabulatetheactuallyachievedfiguresandmonitorthem.
QualitativeIndicators
Setinitiallyexemplifiedqualitativeobjectivesfortheendoftheplannedperiodandevaluatetheresultsactuallyachievedattheendoftheplannedperiod.
Setexemplifiedqualitativeobjectives.
Tabulateactuallyachievedresultsandevaluatethemqualitatively.
MilestoneIndicators
Forissuesthatrequiresteadyprogressinactionovertheme-diumtolongterm(about3years),setinitiallyconcreteactions(milestones**)totakeeachyearandevaluatetheextenttowhichtheyachievethemilestone(ifnecessary,amilestonemaybemodifiedatthebeginningofthenextyear).
Setinitiallyintheplanned3-yearperiodmilestones**(foreachyear).Reviewattheinitialpointinthesubsequentyears.
Evaluatetheresultsbasedonthealreadysetmilestones.*
*QuantitativeMilestoneindicatorsmayalsobeevaluatedfromaqualitativeaspect.**Quantitativefiguresmaybeincorporatedinmilestones.
Basic Principle
Basic Principle
Functions required for organization and finances
Risk-assuming capacity
Expertise
Sustaining credibility
Negotiating power
Speed with flexibility
Speed with flexibility Speedy,accuratecollectionofprojectinformation
Expertise Riskanalysisoflong-termprojectsinvolvingsubstantialcost
Makingpoliciesforbiddingandfinancialsupport
Formulatingprojects,winningorders,constructionandoperationinpublic-privatepartnerships
Negotiating power Dialoguewithhostcountrygovernmentsandagenciesbydrawingonoverseasnetworkandexpertise
FormulatingafinancingstructurecapableforJapantoprovidesupport
Sustaining credibility Solidfinancialpositioncapableofsupportinglargefinancialsupport
InformationdisclosureandIRactivitiesbasedoninternationalrules
Risk-assuming capacity Offeringcompetitivefinancingterms
Basic Principles (on Organization and Finances) and Their Backdrop
Realizingprojectsstrategicallywithoriginalvalueadded,whilebeingdeeplyinvolvedintheprojectformulationstage,therebycontributingtoeconomicgrowthinJapanandtheworld
OperationsBasic Principle
FinancesOrganization
TheMedium-TermBusinessPlancontainsthefollowingcontent.
TherearefourtypesofperformanceindicatorsusedintheMedium-TermBusinessPlanasshownbelow.ObjectivesaresetintheAnnualBusinessPlanforeachfiscalyear,andtheManagementAdvisoryandEvaluationCommitteewillevaluatetheperformanceattheendofeachfiscalyearbyassessingtheextenttowhichtheinitially-setobjectiveshavebeenachieved.
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PDCA Cycle of Medium-Term Business Plan and Annual Business Plan
Supporting Development and Acquisition of Overseas Resources Based on Japan’s Natural Resources Policies
Supporting Steadfastly the Area of Preserving the Global Environment
Supporting Overseas Development of Infrastructure Projects
Agenda and Action Plan Performance Indicator Type
Supportingdevelopment/acquisitionof re-sourcesintheupstreamsectorandastablesupplyof resourcesbasedonthe JapanesegovernmentpolicyoftakingadvantageofyenappreciationandthechangedenvironmentinthewakeoftheGreatEastJapanEarthquake
Numberofloan,guaranteeandinvestmentcommitmentsfortheprojects/transactionscontributingtoacquisitionofinterestsinresources,takingtheirdeliveryandobtainingtheirsalesconcessions
Quantitative
Amongtheabovecommitments,thenumberofthosecontributingtosecuringastablesupplyofenergyresources
Quantitative
Amongtheimmediatelyabovecommitments,theiramountsofoil,naturalgas,copperandironores,andcoalobtainedbynewacquisitionanddelivery
Monitoring
Efforts(includingsupportforrelatedinfrastructure)toreducetheprocurementcostofnaturalgasforJapan
Qualitative
Agenda and Action Plan Performance Indicator Type
Realizingsteadfastlysuchenvironmentalproj-ectsasrenewableenergy,energyefficiencyim-provementandhighlyefficientpowergeneration
Numberof loan,guaranteeand investmentcommitments forsuchenvironmentalprojectsas renewableenergy,energyefficiency improvementandhighlyefficientpowergeneration
Quantitative
Projectedreductions ingreenhousegasemissions innewprojects towhich loan,guaranteeandinvestmentcommitmentsweremade
Monitoring
Agenda and Action Plan Performance Indicator TypeActivelysupportingoverseasdevelopmentofinfrastructureprojectsbyJapanesefirms
Numberofloan,guaranteeandinvestmentcommitmentssupportingoverseasdevelop-mentofinfrastructureprojects
Quantitative
Strengtheningeffortstosupporttheformulationofhighlystrategicprojects
Implementingsupportfortheformulationofhighlystrategicprojects Qualitative
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Medium-Term Business Plan
(Plan)
Annual Business Plan
(Plan)
Implementation,Monitoring
(Do)
Evaluation of the Medium-Term
Business Plan(Check)
Evaluation(Check)
Feedback(Action)
Feedback(Action)
PDCA Cycle forAnnual Business
Plan
PDCA Cycle forMedium-Term Business Plan
(3 years)
JBICiscommittedtoperformingitsmissionandrolesappropriatelyasapolicy-basedfinancinginstitutionbyimplementingthePDCAcycleintheMedium-TermBusinessPlanandtheAnnualBusinessPlan.
Strategies, Agendas (Action Plans) and Performance Indicators
Theagendas(actionplans)andperformanceindicatorsfortheOperationalStrategiesforEachThematicAreas(sixstrategies)andBasicStrategies(eightstrategies)areasbelow.
Operational Strategy for Each Thematic Area
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Enhancing Support for Mid-Tier Enterprises and SMEs
Agenda and Action Plan Performance Indicator Type
PressingforwardeffortsforactivesupportNumberofloan,guaranteeandinvestmentcommitmentsformid-tierenterprisesandSMEs Quantitative
Numberofmid-tierenterprisesandSMEssupportedbytheabovecommitments Monitoring
Increaseopportunitiestodisseminateinforma-tionsuchasseminarsandconsultingsessions
Numberofseminarsandconsultingsessionsorganizedformid-tierenterprisesandSMEs Quantitative
Supporting Strategic Overseas Business Activities of Japanese Firms
Agenda and Action Plan Performance Indicator Type
SupportingJapanesefirms’strategytocaptureoverseasmarketsharesandthemaintenanceandstrengtheningoftheirsupplychains
Numberof loan,guaranteeand investmentcommitments foroverseas investmentprojectsbyJapanesefirmsorprojectsforsupportingassociatedoperationswithsuchprojects(Showbreakdownbydevelopedcountryformonitoringpurposes)
Quantitative
Numberofloan,guaranteeandinvestmentcommitmentsforexporttransactionsbyJapanesefirms(Showbreakdownbydevelopedcountryformonitoringpurposes)
Quantitative
SupportingM&Aactivitiesbasedonthegov-ernmentpolicyof takingadvantageofyenappreciation
Numberofloan,guaranteeandinvestmentcommitmentsforM&Adeals Quantitative
ThetotalamountofM&Adealsabove Monitoring
Preventing Disruptions to Financial Order in the International Economy or Counteracting Their Adverse Impact
Agenda and Action Plan Performance Indicator Type
Preventingdisruptions tofinancialorder inthe internationaleconomyorcounteractingtheiradverse impactwithspeed,flexibilityandeffectiveness
Numberofcountriesforwhichmonitoringwasdonewithrespecttomacroeconomicconditions
Quantitative
Numberofloan,guaranteeandinvestmentcommitmentsforpreventingdisruptionstofinancialorderintheinternationaleconomyorcounteractingtheiradverseimpact
Monitoring
Partnership with Private Financial Institutions (Devotion to Complementing Private Business Operations)
Agenda and Action Plan Performance Indicator Type
Pressing forwardstrategicpartnershipswithprivatefinancialinstitutions,includingappropri-atecofinancing
Theshareofcofinancingcommitmentsinthenumberofloancommitments(excludingmatching*loansandloanstobanks)
Quantitative
Privatesectorfundsmobilizedintheprojects/transactionstowhichJBICmadeloan,guaranteeandinvestmentcommitments
Monitoring
NumberofprivatebankswithwhichJBICenteredintoapartnership Quantitative
*Applicationofthesamecredittermsofferedbytheparticipatingornon-participatingcountriesundertheOECDArrangementonGuidelinesforOfficiallySupportedExportCredits
Effective Use of a Variety of Tools Such as Equity Investment
Agenda and Action Plan Performance Indicator TypeActiveuseofequityinvestment Numberofinvestmentcommitmentsforequityinvestment(participation)projects Quantitative
Effectiveuseofguaranteesandotherfinancialinstruments
Recordofeffectiveuseofguaranteesandotherfinancialinstruments Qualitative
Pressingforwardeffortstofinancewithlocalcurrencies
Numberoflocalcurrencieswithwhichloan,guaranteeandinvestmentcommitmentsweremade(outstanding)
Monitoring
PressingforwardPFandSF*projects NumberofcommitmentstoPFandSFprojects Quantitative
*Projectfinanceandstructuredfinance
Wielding Negotiating Power with External Counterparties by Leveraging JBIC’s Status as a Government-owned Institution
Agenda and Action Plan Performance Indicator TypeStrengtheningrelationswith foreigngovern-mentsandgovernmentagencies, increasingcollaborationwithmultilateralinstitutionsandforeignofficialinstitutions,andwieldingJBIC’snegotiatingpowerwithexternalcounterparties
Effortstostrengthenrelationswithmajorcountries(theirgovernmentsandgovern-mentagencies)
Qualitative
CaseswhereJBICwieldeditsnegotiatingpoweramongthenumberofloan,guaranteeandinvestmentcommitmentswithwhichcross-borderloanswereextended
Quantitative
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Basic Strategies
Basic Strategies
Conducting Speedy, Flexible and Efficient Operations
Agenda and Action Plan Performance Indicator Type
Enhancingstrategicandflexibleallocationofgivenmanagementresources
Customersatisfactionsurvey(levelofsatisfactionwiththetimetakenforapprovingloansandotherfinancialinstruments)
Quantitative
Employeeconsciousnesssurvey(awarenessofequalizingworkloadamongemployers) Monitoring
Efficientcorporatemanagementwithworkflowimprovementandothermeans
ProgressinkeyBPR*measures Milestone
Averageovertimeworkhoursperemployee Monitoring
UpgradingITinfrastructureProgressinITinvestment,includingimprovementinthecommoninfrastructureandtheestablishmentofabackupcenter
Milestone
*BusinessProcessRe-engineering
Efforts to strengthen expertise in the organization
Agenda and Action Plan Performance Indicator Type
Recruitingandfosteringhumanresourcesca-pableofprovidinghighvalue-addedservices
Numberoftrainingsessionsforprovidingadvancedfinancingandappraisalmethods(includingthenumberofparticipantsformonitoringpurposes)
Quantitative
Thepercentageofthestaffwhohaveexperienceinanoverseaspostingorwhowereloanedtooverseasinstitutions(duringthepast5years)
Quantitative
Strengtheningthestrategiccollectionanddis-seminationofrequisiteinformation
Domesticandforeignentitieswithwhichanexchangeofviewscontinuestotakeplacethroughoperationalcooperationorassignment,excludingclients(cumulativetotal)
Quantitative
Self-disciplined corporate management
Agenda and Action Plan Performance Indicator Type
Corporatemanagementthatmeetstheneedsofclients
Customersatisfactionsurvey(overalllevelofsatisfaction) Quantitative
Customersatisfactionsurvey(levelofsatisfactiononthetimetakenforloanapproval) Quantitative
TheaverageappraisalperiodforPFprojects Monitoring
Promotingdisclosureandpublic relationsactivity
NumberoftimestheJBICwebsiteandothermediumsareaccessed Monitoring
Mainstreamingcomplianceefforts Numberofinternaltrainingsessionsoncompliance Quantitative
Managing Risks Commensurate with Risk Exposure of Strategic Operations
Agenda and Action Plan Performance Indicator TypeAmore improvedandadvancedframeworkforappropriatelyassessingandmanagingma-jorrisksassociatedwithconductingstrategicoperations
LoanassetstobedisclosedundertheFinancialRevitalizationAct Monitoring
Theratioofprovisionsmadefortheaboveassets Monitoring
NumberofmeetingsheldbytheRiskAdvisoryCommittee Monitoring
Maintaining appropriate profit levels and a stable fiscal position
Agenda and Action Plan Performance Indicator Type
SecuringappropriatelevelsofprofitsandlossesOverallprofitmargin* Monitoring
Theratioofadministrativecost Monitoring
Maintainingfinancialstability CapitalAdequacyRatio(BISbasis) Monitoring
PreparationforInternationalAccountingStandard
StateofexaminationwithrespecttointroducingIFRS Milestone
*YieldsonInterest-earningAssets-CostsonInterest-bearingLiabilities
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TheperformancewillbeevaluatedattheendofeachtermbytheManagementAdvisoryandEvaluationCommittee,whichconsistsofexternalexpertsandoutsidedirectors,andtheresultwillbepublished.
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Outline of Operations in FY20124·
Operational Highlights
projectsfordevelopingunconventionalenergyresourcesinNorthAmerica,—coal-bedmethane(CBM)1andshalegasinCanada,shaleoilandtightoil2intheU.S.—liquefiednaturalgas(LNG)projectsinAustraliaandPapuaNewGuinea,andcoalmineprojectsinAustraliaandCanada.JBICalsoprovidedloanstosupporttheimportofLNGandoil. Inthemineralresourcessector,JBICprovidedloansforthedevelopmentof,andacquisitionofinterestsin,anironoremineinAustraliaandacoppermineinChile.Regardingraremetals,JBICsupportedanickel/cobaltmixedsulfideproductionprojectinthePhilippines,amolybdenumsmeltingprojectinChile,andaniobiumdevelopmentandproductionprojectinBrazil.
International Infrastructure SectorIn the power sector, JBIC supported a gas-fired combinedcycle power plant project in Thailand—in which Japanesecompaniesparticipatedasanexporterorprojectowner—aswellascoal-firedpowerplantprojectsinMoroccoandChile.JBICalsosupportedtheexportoftransmissionandsubstationequipmenttoIndonesia.JBIC’ssupportinthetransportationsector covered an intercity express railway project in theU.K.—in which Japanese companies participated—and theexportofrailwaycarstoVenezuela.Inthetelecommunica-tionssector,supportwasprovidedfortheexportofaportionofthesubmarineopticalfibercablesystemthatwillconnectSingaporewithJapan.Inthewatersector,JBICsupportedboththeexportofequipment foraseawaterdesalinationplantinSingaporeandaprojectforproducingandsellingwatertreatmentfacilitiesinChina. Inotheractivities,JBICsubscribedtothenewsharesissuedbytheDelhiMumbaiIndustrialCorridorDevelopmentCorpo-rationLimited(DMICDC)inIndia,thecoreprojectexecuting
ThetotalamountofcommitmentsJBICmadeduringFY2012inloans,guarantees,andequityparticipationswas¥4,240.9billion,anall-timehigh. JBIC’s major operations in each sector for FY2012 areshownbelow:
Energy and Natural Resources SectorJBICprovidedloansforthedevelopmentandacquisitionofinterests for a number of projects in the energy sector inwhich Japanese companies were involved. These include
Commitments by Purpose of Financing (FY2012.Unit:billionsofyen)
Export Loans126.6(3%)
Import Loans304.3(7%)
Overseas Investment Loans3,138.5(74%)
Guarantees303.2(7%)
Equity Participations74.3(2%)
Bridge Loans83.2(2%)
Untied Loans210.5(5%)
Commitments by Region (FY2012.Unit:billionsofyen)
¥4,240.9billion
Europe660.6(16%)
The Middle East305.9 (7%)
Africa84.3 (2%)
Asia513.6(12%)
Others154.2(4%) Latin America and
the Caribbean805.5(19%)
¥4,240.9billion
North America
710.8(17%)
Oceania1,005.7 (24%)
Changing Composition of Loans, Equity Participations and Guarantees (Commitments) (Unit:billionsofyen)
FY1955
FY1970
FY1985
FY2000
FY2012
61.3 billions of yen
543.0 billions of yen
888.4 billions of yen
1,204.7 billions of yen
4,240.9 billions of yen
174.0(14%)
356.4(40%)
31.1(6%)
7.4(1%)
14.2(2%)
60.3(98%)
■ Export Loans ■ Import Loans ■ Overseas Investment Loans ■ Untied Loans ■ Governmental Loans ■ Bridge Loans ■ Guarantees ■ Equity Participations
304.3(7%)
321.4(27%)
233.5(26%)
402.8(74%)
3,138.5(74%)
523.7(43%)
182.4(21%)
33.3(6%)
303.2(7%)
118.3(10%)
67.4(6%)
101.4(11%)
68.5(13%)
1.0(2%)
74.3 (2%)
Guarantees 0.5 (0%)
210.5 (5%)
83.2 (2%)126.6 (3%)
Profile of JBIC 4. O
utline of O
peratio
ns in FY2012
1
1. Coal-bedmethane(CBM) ismethaneextractedfromandnearcoal-beds. It isdrawingattentionalongwithshalegasas“unconventional”naturalgas.
2. Unlikeconventionaloilthatisextractedfromwellsnaturallystoredinthestratum,tightoilexistswidelythroughtightstratasuchassandstone,limestoneandshaleformations,andthemethodsusedforitsextractionaresimilartothoseusedinshaleoilandgasextraction(horizontaldrilling,hydraulicfracturing,etc.).
12
JBIC Annual Report 2013
Profile of JBIC 4. O
utline of O
peratio
ns in FY2012
1
agency responsible for advancementof theDelhiMumbaiIndustrialCorridor(DMIC)Project3.JBICalsodecidedtoinvestinthreeinfrastructurefunds,whichtargetNorthAmericaandEurope,SoutheastAsia,andIndia,respectively.
Supporting Japanese Companies in Exportation of Their Products, and Manufacturing and Sales Business Abroad
JBICsupportedtheexportofmachineryandequipment in-cluding:oilrefinery-relatedequipmenttoKazakhstan;textilemanufacturingmachinerytoAngola;apickingline-tandemcoldmillandpetrochemicalplant-relatedequipmenttoIndia;andequipmentforanethyleneproductionplantinTurkey,aswellasequipmentneededfortheinfrastructurementionedabove.JBICalsosupportedtheexportofshipsincluding:bulkcarrierstoTurkey,theBahamas,andHongKong;aswellasRamformvesselstotheBahamas.Inaddition,JBICextendedcreditlines,designedtosupportJapaneseexports,tolocalfinancialinstitu-tionsinMalaysia,India,Turkey,Russia,andSouthAfrica. Inadditiontosuchexportassistance,JBICalsosupportedJapanese companies in manufacturing and sales of theirproducts overseas in a wide range of industries, includingautomobiles,electricalequipment,electronics,machinery,andmetals.JBICalsoassistedJapanesecompaniesinmergingandacquiringforeignfirmsinvariousareas,includingcommercialmotors,air-conditioners,food,medicalequipment,insurance,andaircraftleasing.
Supporting Overseas Business Operations of Japanese SMEs
JBICprovided loans for JapaneseSMEstoassist themwiththeirbusinessoperationsoverseas,particularly inAsia. JBICalsoextendedinvestmentcreditlines,whicharedesignedtosupportJapaneseSMEsinexpandingtheirbusinessoperationsoverseas,tothreeJapanesebanks:TheSenshuIkedaBank,Ltd;ResonaBank,Limited;andSumitomoMitsuiBankingCorpora-tion.Furthermore,JBICacquiredanequitystakeinaprivate
equityfundthatisaimedatsupportingJapanesecompaniesinexpandingtheirbusinessoperationsintotheASEANregion,managedbyaSingaporesubsidiaryofMizuhoBank,Ltd.
Promoting Renewable Energy and Conserving the Global Environment
JBICsupportedarenewableenergypowergenerationprojectinCanadainwhichaJapanesecompanyparticipatedbywayofprojectfinancing4denominatedinCanadiandollars.InBrazil,JBICsupportedaco-generationprojectatarefineryandaflaringgasreductionprojectatmultipleoffshoreoilconcessionstoreducegreenhousegas(GHG)emissions.Moreover,JBICex-tendedexportcreditlines5toseverallocalfinancialinstitutionsinIndiaandTurkeytofinancetheexportfromJapanofrenew-ableenergy-relatedequipmentandenergy-savingequipment.
Preventing Disruptions to International Financial Order or Taking Appropriate Measures with Respect to Damages Caused by Such Disruptions
Inordertoaddressthepotentialadverseimpactsofcontin-uedinternationalfinancialmarketvolatilityontheIndonesianeconomy,JBICofferedaContingentFacilitytotheGovernmentofIndonesiaasaprecautionarymeasuretoenhanceitscrisispreparedness,inparallelfinancingwiththeWorldBank,theAsianDevelopmentBank(ADB),andtheGovernmentofAus-tralia.JBICalsoextendedbridgeloanstotheGovernmentofMyanmartoclearthearrearsofpastloansfromtheADBandtheInternationalDevelopmentAssociation(IDA).Theobjectivewastohelpthecountryreturntotheinternationalfinancialmarket.
3. TheDelhiMumbaiIndustrialCorridor(DMIC)ProjectisaJapan-Indiajointdevelop-mentprojectwhichaimstobuildafreightraillinetoconnectDelhiandMumbaianddevelopinfrastructurealongthelinesuchasindustrialestates,logisticsparks,powerplants,roads,ports,residentialareasandcommercialfacilitiesmainlybymobilizingprivateinvestments.
4. Projectfinanceisafinancingstructurethatreliesprimarilyonthecashflowgener-atedbytheprojectforrepayment.Itisusedforfinancinglargeprojectsinsuchsectorsaspowergenerationandoil,gasorothernaturalresourcedevelopment.
5. AnexportcreditlineisaformofexportcreditinwhichJBICcommitstothemaximumamountofcredittobeextendedtoforeignbanksorotherentitiestofinanceexportsofmachinery,equipmentandservicesfromJapan.
Planned and Actual Lending and Investments (Unit:billionsofyen)
FY2009 FY2010 FY2011 FY2012Plan Actual Plan Actual Plan Actual Plan Actual
ExportLoans 108.0 43.8 113.0 73.6 120.0 73.9 200.0 143.1
ImportLoansandOverseasInvestmentLoans
1,010.0 2,382.8 1,080.0 1,113.9 1,113.5 913.0 1,879.0 2,307.4
UntiedLoans 82.0 186.7 207.0 85.4 100.0 103.2 100.0 132.0
EquityParticipations 20.0 13.6 45.5 26.8 200.0 7.3 100.0 17.2
Securitization 30.0 ─ 30.0 19.0 19.0 ─ 19.0 ─
Total 1,250.0 2,627.0 1,475.5 1,318.8 1,552.5 1,097.6 2,298.0 2,599.8
Operational Results
TotaldisbursementsmadebyJBICinFY2012stoodat¥2,599.8billion.
13
JBIC Annual Report 2013
Statement of Operations(April1,2012–March31,2013;millionsofyen)
Amount
Ordinary Income 217,291
InterestIncome 167,947
FeesandCommissions 23,288
OtherOrdinaryIncome 9,171
ReceiptsfromtheNationalBudget 256
OtherIncome 16,627
Ordinary Expenses 153,708
InterestExpenses 119,510
FeesandCommissionsPayments 1,427
OtherOrdinaryExpenses 597
GeneralandAdministrativeExpenses 17,551
OtherExpenses 14,620
Ordinary Profit 63,583
Extraordinary Income 1
Net Income 63,585
Balance Sheet(AsofMarch31,2013;millionsofyen)
Amount Amount
Assets Liabilities and Net Assets
CashandDuefromBanks 837,986 BorrowedMoney 7,234,598
ReceivablesunderResaleAgreementsNote5
284,902 BondsPayableNote7 2,215,962
SecuritiesNote4 122,181 OtherLiabilities 216,171
LoansandBillsDiscountedNote6 10,555,128 ProvisionforBonuses 445
OtherAssets 338,679 ProvisionforDirectors’Bonuses 5
Property,PlantandEquipmentNote8
28,206 ProvisionforRetirementBenefits 15,595
IntangibleAssets 1,352 ProvisionforDirectors’RetirementBenefits
29
Customers’LiabilitiesforAcceptancesandGuarantees
2,400,699 AcceptancesandGuarantees 2,400,699
AllowanceforLoanLosses (138,891) Total Liabilities 12,083,506
CapitalStock 1,360,000
RetainedEarnings 851,685
TotalShareholders'Equity 2,211,685
ValuationDifferenceonAvailable-for-saleSecurities
2,221
DeferredGainsorLossesonHedges
132,831
ValuationandTranslationAdjustments
135,053
Total Net Assets 2,346,738
Total Assets 14,430,245 Total Liabilities and Net Assets 14,430,245
*Seepages102–104fordetailsofNotes4to8
The First Term for the New JBIC (FY2012)
Profile of JBIC 4. O
utline of O
peratio
ns in FY2012
1
Financial Results
attributabletoJBIC’sfinancialsupportinrelationtooverseasM&AactivitiesbyJapanesecompaniesandtooverseasdevel-opmentandacquisitionofstrategicallyimportantresources.Interestexpensesamountedto¥119.5billion,withordinaryexpensesregistering¥153.7billion.Asaresult,ordinaryprofitstoodat¥63.5billion.Aftertakingaccountofextraordinaryincome,netearningsforFY2012amountedto¥63.5billion.
(2) Balance SheetTotalassetsincreasedto¥14,430.2billionfromFY2011.Thiswas largely attributable to an increase in loans in foreigncurrencies. Total liabilities decreased to ¥12,083.5 billionfromFY2011. Thiswasattributable to two factors.One isanincreaseof¥1,979.1billioninborrowedmoneyfromthebeginningof the year to¥7,234.5billiondue in largeparttonewborrowingsfromtheForeignExchangeFundSpecialAccount.Theotherfactorisadecreaseof¥162.7billioninbondspayableduring thesameperiod to¥2,215.9billion,mainlybecauseredemptionsexceeded issuance.Totalnetassetsreached¥2,346.7billion,whichincluded¥63.3billioninnetearningsand¥69.0billionincapitalcontributions,bothintheAccountforJBICOperations.
Principles of Accounting(1) Separation of AccountJBICconductedJBICoperationsandFinancialOperationsforFacilitatingRealignmentofUnitedStatesForcesinJapan(USFJ)on separateaccountspursuant toArticle18.2of theUSFJRealignmentSpecialMeasuresAct.Thispracticewasdiscon-tinuedduringFY2012.( See “Discontinuation of the Financial
Operations for Facilitating Realignment of USFJ” on page 16.)
(2) Preparation of Financial StatementsPursuanttotheCompaniesActandArticle26oftheJapanBankforInternationalCooperationAct(JBICAct), JBICpre-paresfinancialstatementsandsubmitsthemtotheMinisterofFinance.The reporton thefinal settlementofaccountsissubmittedtotheGovernmentofJapan,togetherwiththefinancialstatements,and,afterexaminationbytheBoardofAuditors,totheDiet.
Statement of Operations and Balance Sheet(1) Statement of OperationsInFY2012,interestincomeamountedto¥167.9billion,withor-dinaryincomereaching¥217.2billion.Thesefiguresarelargely
14
JBIC Annual Report 2013
Funding Sources: Actual and Planned(Unit:billionsofyen)
FY2009 Actual FY2010 Actual FY2011 Actual FY2012 Actual FY2013 Planned
CapitalContributionfromtheGeneralAccount ─ ─ ─ ─ ─
CapitalContributionfromFILPIndustrialInvestment 20.0 35.5 200.0 69.0 ─
BorrowingfromFILPFiscalLoan 906.6 690.9 201.0 400.0 600.0
BorrowingfromForeignExchangeFundSpecialAccount 987.4 323.5 230.4 1,744.9 1,223.1
Government-guaranteedForeignBonds* 626.3 463.3 423.2 205.3 660.0
FILPAgencyBonds* 70.0 50.0 50.0 ─ 20.0
OtherSourcesofFunds,IncludingRepayments 16.7 (244.4) (6.9) 180.6 (192.1)
Total 2,627.0 1,318.8 1,097.6 2,599.8 2,311.0
*Figuresforbondsareindicatedinfacevalue.
Funding Sources
anteedForeignBondissuance,capitalcontributionsfromthegovernment,andborrowingsfromtheForeignExchangeFundSpecialAccountconstitutepartofthenationalbudget(eitherasanitemintheGeneralAccountbudgetortheSpecialAc-countbudget).Therefore,theyaresubmitted,togetherwiththeoperatingbudgetofJBIC,totheDietforapproval.RecentfundingresultsandplansforFY2013areshowninthetablebelow.
JBICfinancesitsoperationsthroughvarioussources,includingborrowingsfromtheFILPFiscalLoan,Government-guaranteedForeignBondissuance,FILPAgencyBondissuance,capitalcontributionsfromthegovernment,andborrowingsfromtheForeignExchangeFundSpecialAccount. As JBICprovides long-termfinancing, itsoperationsarefinanced by long-term funds to match maturities betweenfundingandlendinginstruments. BorrowingsfromtheFILPFiscalLoan,Government-guar-
Profile of JBIC 4. O
utline of O
peratio
ns in FY2012
1
Funding Sources
Financial Market
Japanese and foreign firms, foreign financial institutions, foreign governments and government agencies, multilateral financial institutions
Special Account for Fiscal Investment and Loan Program Fund
Foreign Exchange Fund Special
Account
Loans / Investments
Internal Funds**Repayments, etc.
FILP Agency Bonds
Government-guaranteed
Foreign Bonds
Fiscal Loan Fund Account
Loans
Investment Fund Account
Capital Contribution
Loans
FILP Bonds
15
JBIC Annual Report 2013
Government-guaranteed BondsJBICraisespartofitsfundsthroughgovernment-guaranteedbondissuanceininternationalcapitalmarkets.Outstandinggovernment-guaranteedbondsattheendofFY2012amountto¥1,528.0billionatfacevalue,whichaccountsfor16.2%ofthetotaloutstandingborrowingsandbonds. JBICprovidesforeigncurrency loanswhennecessary foreffectivefinanc-ingoperations.Financial resources fundedbygovernment-guaranteedbond issuance in international capitalmarketsareappliedtosuchfinancialoperations. AsJapanesecompanieshavebeenrecentlysteppingupoverseasbusinessoperations,therearerisingexpectationsforJBICtoprovidelocalcurrency-denominatedfinancialsup-port.Tomeetsuchfinancialneedsappropriately,JBICissuedgovernment-guaranteedforeignbondsinCanadiandollarsinMarch2013. In the FY2013budget, JBICplans to issue government-guaranteedbondsinthetotalamountofupto¥660.0billion. JBIC’s government-guaranteed bonds receive the sameratingsastheGovernmentofJapanfromtheratingagencies(Aa3fromMoody’sandAA-fromStandard&Poor’sasoftheendofJuly2013).SincetheyaretreatedasassetsforwhichtheBankforInternationalSettlements(BIS)assignszeroriskweightincalculatingthecapitaladequacyratiofordepositoryinstitutions,thesebondsprovideaqualityinvestmentoppor-tunityforinvestorsininternationalcapitalmarkets.
FILP Agency BondsIncompliancewiththegovernmentpolicytoreformtheFILP,JBIChasissuedbondswithoutgovernmentguarantee(FILPagencybonds)inthedomesticcapitalmarketsinceFY2001,therebyraisingfundsbasedonitsowncreditworthiness.IntheFY2013budget, JBICplans to issueFILPagencybondstotalingupto¥20.0billion. JBIC’sFILPagencybondsreceivethesameratingsastheGovernmentofJapan(asoftheendofJuly2013)asshownbelow.TheyaretreatedasassetsforwhichBISassigns10%riskweightincalculatingthecapitaladequacyratiofordeposi-toryfinancialinstitutions.
Rating&InvestmentInformation,Inc(R&I):..........AA+ JapanCreditRatingAgency,Ltd.(JCR):...................AAA Moody’s:.............................................................................Aa3 Standard&Poor’s:..........................................................AA–
Profile of JBIC 4. O
utline of O
peratio
ns in FY2012
1
Discontinuation of the Financial Operations for Facili-tating Realignment of USFJ
JBICcontinuedtoconductfinancialoperationsforfacilitat-ingrealignmentofUnitedStatesForcesinJapan(USFJ)in thespecialaccount for thispurposeunder theUSFJRealignmentSpecialMeasuresAct.TheseoperationsweredesignedtofinanceprojectsnecessarytofacilitatetherelocationofUSFJ to theU.S.withequity investments,loans,andotherfacilities. However, JBICdecidedtodiscontinuetheseopera-tionsfollowingtheannouncementoftheJointStatementof the Japan-U.S. Security Consultative Committee onApril27,2012. In thisstatement, thetwogovernmentsaffirmedthatJapan’sfinancialcommitmentistobethedirectcashcontributionasstipulatedinArticle1oftheAgreementbetweentheGovernmentof JapanandtheGovernmentoftheUnitedStatesofAmericaConcerningtheImplementationoftheRelocationofIIIMarineExpe-ditionary Force Personnel and Their Dependents fromOkinawatoGuam.TheyalsoaffirmedthatotherformsofJapanesefinancialsupporttoGuamrelocationwouldnotbeutilized.WhiletakingintoaccountthewishesoftheGovernmentofJapan,JBICdiscontinueditsfinancialoperationsforfacilitatingrealignmentofUSFJbytheendofSeptember2012.BytheendofNovember2012,JBICeliminatedthespecialaccountfortheseoperationsafterturningtheresidualassetsovertothenationaltreasury. DuringFY2012,nolendingwasmadeinthisaccount.
16
JBIC Annual Report 2013
2The Environment Surrounding JBIC and
Its Challenges
1 Energy, Natural Resources and Environment Finance Group 18
2 Infrastructure Finance Group 22
3 Industry Finance Group 26
17
JBIC Annual Report 2013
◉ Oil ● Natural Gas■ Coal◆ Iron Ore▲ Copper✚ Other
Mineral Resources, etc
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Frade Oil Field, Brazil
Purchasing oil product from PDVSA, Venezuela
Sakhalin I, Russia
Sakhalin II, Russia
Pagardewa Oil Field, Indonesia
En�eld Oil Field
Advance Payment Loan to ADNOC
Kashagan Field, Kazakhstan
BTC PipelineACG Field,Azerbaijan
Norwegian North Sea Oil Field
British North Sea Oil Field
LNG, Qatar
METOR Methanol, Venezuela
Oil & Gas Field, US
Marcellus Shale Gas, US
Cordova Shale Gas, CanadaMontney Shale Gas, Canada
IGBC Shale Gas, Canada
Coal-Bed Methane, Canada
Curtis LNG
Bayu Undan LNG
PNG LNGTangguh LNG, Indonesia
Kangean Oil & Gas Field, Indonesia
Gas Fields, Malaysia
Tiga LNG, Malaysia
Gorgon LNG
Pluto LNGWheatstone LNG
Cape Lambert Iron Ore Shipping Port
Shark Bay Salt Field
Worsley Bauxite Mine &Alumina Renery
Rasp Zinc &
Lead Mine
Rolleston Mine
Moolarben Mine
Forestation, New Zealand
Tayan Alumina Project, Indonesia Taganito Nickel Project, Philippine
Advance Payment Loan to VINACOMIN, Viet Nam
Assmang Iron, Zinc,Chrome Ore Mine,
South Africa
MOZALAluminum Smelter,
Mozambique
Ambatovy Nickel, Madagascar
Woodchip, Mozambique
Tungsten Mine, Portugal
Kharassan Uranium Mine, Kazakhstan
West Mynkuduk Uranium Mine, Kazakhstan
Neryungri Mine, Russia
Pogo Gold Mine, US
Alouette Aluminium Smelter, Canada
Grande Cache Coal Mine, Canada
Similco Mine, Canada
Drummond Project, Columbia
Bayovar Phosphate Mine, Peru
Cerro Verde Mine, PeruSan Cristobal Zinc Mine, Bolivia
Sierra GordaCopper Mine,
Chile
Promoly Project, ChileEscondida Mine, Chile
Caserones Copper Mine, ChileLos Pelambres Mine, Chile
Esperanza Mine, Chile
AMAZON Alumina Renery / Aluminum Smelter, BrazilForestation, Brazil
CENIBRA Pulp, Brazil
NAMISA Mine, Brazil
MUSA Mine, Brazil
Logistical Support for Iron Ore Transportation, Brazil
Eagle Ford Shale Oil, US
Oil Field, UAE
Woodchip, Indonesia
Prelude FLNG
Ichthys LNG
Roy Hill MineJimblebar Mine
■ Caval Ridge Mine■ Isaac Plains Mine■ Byerwen Mine■ Kestrel Mine■ Minerva Mine■ Oaky Creek / NCA Mine
Boggabri Mine
Stock Acquisition ofAnglo American Sur, Chile
Permian Basin Tight Oil, US
Suska Sukunka Mine, Canada
Energy, Natural Resources and Environment Finance Group1·
Increasingly Intense Scramble for Acquiring ResourcesForJapan,acountryscarcelyendowedwithnaturalresources,itisimperativetosecurestablesuppliesofoverseasenergyandmineralresourcesinordertomaintainandmakeprogressineconomicactivity.JBIChasbeenprovidingfinancialsupporttoJapanesecompaniesindeveloping,acquiringinterestsinandimportingoverseasnaturalresources,therebycontribut-ingtosecuringitsstablesupplytoJapan. Globalcompetitionforacquiringenergyandmineralre-sourcesremainstough,posingachallengetoJapaninobtain-ingstableandaffordableenergyandmineralresources.
Rising Risk on the Demand and Supply SidesGrowingdemand forenergy inemergingmarket countrieshasexertedsignificantimpactsontheglobaldemand-supplybalanceofenergy.Inparticular,energyconsumptionintheAsiaandOceaniaregions,which includesChina, IndiaandSoutheastAsia,showsmuchhighergrowthratesthanotherregions. Crudeoilposesasignificantgeopoliticalriskfactorinviewofthefactthatroughly50%ofitsreservesareconcentratedintheMiddleEast.Japan'sdependenceonthisregionforcrudeoildeclinedatonetime,buthasnowincreasedtomorethan80%ofitsimports.ThisisattributabletorisingdemandforoilinAsiancountries.Asthesecountrieshavechanneledthepreviouslyexportedoiltomeetoildemandintheirdomestic
markets,theiroilexportstoJapanhavedecreased. ThesituationinwhichJapanprocuresliquefiednaturalgas(LNG)hasbeenchangingatafastpaceinrecentyears.Untilabouttheyear2000,JapanhadapredominantshareofglobalLNGtransactions,butitssharehasdiminishedtoroughly30%today.AsChinaandIndiahavebeenrapidlyincreasingimportsofLNG,itisexpectedthatthedemandwouldsharplyclimbinthefuture.InJapan,whichhasfounditverydifficulttosupplyelectricityfromnuclearpowerstationsaftertheGreatEastJapanEarthquake,LNGisincreasingitspresenceasamajorsourceofenergy,asnaturalgasproduceslessgreenhousegas(GHG)emissionsrelativetooil.Inaccordancewiththesitua-tionabove,suppliercountriesarechangingaswell.IndonesiaandMalaysia,bothofwhicharetraditionalsuppliersofLNGtoJapan,havecontinuedtopostremarkablegrowth.ThesetwocountrieshavehadtocutbackLNGexportstoJapanastheyhaveseenadeclineinproductionandasustainedincreaseindomesticdemandfortheresource. Inthemineralresourcesector,demandhasbeengrowinginemergingmarketcountries.Inaddition,oligopolyhassig-nificantlydisturbedthedemand-supplybalance.Forexample,intheironoreindustrythetopthreecompaniesaccountformorethanhalfofworldseabornetradeinironore,andthetopfourcoalcompanieshavecreatedanoligopolyintheworldmarket.There isagrowingneedtocopewith theunevendistributionof individual typesof oreminerals andquality
AsofJuly31,2013
Major Projects Over the Last 10 Years (Amountofloanfornaturalresourceprojects(signed):ApproxUS$74Billion)
2
The Environment Surrounding JBIC
and Its Challenges
1. Energy, N
atural Resources and
Enviro
nment Finance G
roup
18
JBIC Annual Report 2013
deteriorationsofthemineralsofresource-richcountries. Inthisway,variousrisksareincreasingbothonthedemandandsupplysides.ThismeansthatJapanesecompanieshaveaneedtodiversifytheiroverseasinvestments.JBICwillconductoperationsbyfocusingmorethaneveronstrengtheningrela-tionswithresource-endowedcountriesandsuppliers.
Efforts for Stable Procurement of Natural GasJBIC,especially,isstrivingtoobtainnaturalgasbydesignatingitasoneofJBIC’stoppriorities.AfterwhathappenedattheFukushimaDai-ichiNuclearPlant,thestablesupplyofelectricpowerhasbecomeanurgentissueforJapanesepeople'slivesandeconomicactivities.Therearerisingexpectationsforthesupportofastableandaffordablesupplyofnaturalgasasamajorsourceofenergyinthepresent. Responding to these expectations, JBIC is actively sup-portingtheacquisitionofinterestsanddevelopmentofLNG-relatedprojectsaswellastheimportofLNG.InFY2012,JBICsupportedtheWheatstoneLNGProjectinAustraliathroughequityparticipationandaloan.JBICalsoofferedprojectfi-nancing1totheIchthysLNGProjectinAustralia,thefirstmajorLNGoperatorshipprojectforaJapanesecompany. Amidthesedevelopments,JBICisalsosupportinganacqui-sitionofinterestsin“unconventional”naturalgas,suchasshalegasandcoal-bedmethane(CBM)2.InFY2012,JBICsupportedthefundingofJapanesecompaniesforacquiringinterestsinshalegasandCBMfieldsinCanadaforthedevelopmentandproductionofnaturalgas.JBICalsofinancedaprojectaimedtoprocureLNGtankersaspartofJBIC’scomprehensivesup-portforthevaluechainofnaturalgas. Furthermore,JBICismakingeffortstostrengthencoopera-tivetieswithnaturalgas-producingcountriesandmajornatu-ralgasdevelopersinordertoencourageJapanesebusinessestodevelopnaturalgasoverseas. In June2011, JBICsignedamemorandumofunderstanding (MOU)withBPMIGAS,agovernmentagencyinIndonesia,overseeingandcontrolingupstreamoilandgasbusinessactivities,forthepurposeofbuildingabusinessmodeltoencouragefurtherexpansionofIndonesia’stotalnaturalgassupplycapacityandtopromotegas-relatedbusinessopportunitiesforJapanesecompanies.DuringFY2012,JBICsignedacooperationagreementsepa-ratelywiththeBGGroup,aBritishgasmajor,andWoodside,Australia'slargestindependentoilandgascompany.
Spreading Risk with DiversificationTo secure a stable supply of resources, it is important todisperseriskswithdiversification. Firstly,geographicaldiversificationneedstobeconsidered.Asdescribedabove,JapanisheavilydependentontheMiddleEast for oil. Thus, it should consider urgently exploringoilsupply sources fromoutside theMiddleEastanddiversifythemwithintheMiddleEastregion.RegardingLNG,JBIChasmade loans to theSakhalin II Project and LNGprojects in
PapuaNewGuineaandelsewhere,therebycontributingtothediversificationof Japan’s LNG supply sources. JBICwillalsoproactivelyengageintheformulationofLNGprojectsinNorthAmerica,Africaandotheruntappedregions. JBIChastakenstepsinthecoalsectoraswell.InMarch2012,JBICprovidedaloanforthethermalcoaldevelopmentprojectinColombiafromwhichJapanhasimportedhardlyanycoal.Furthermore,JBIChasalsodiversifiedthetargetingcountriesbyapproachingMozambiqueandMongolia,whichare expected to potentially become new major suppliers.Inthesecountries,animportantgoalistomeettheirneedswithproposalsthatdrawonJapanesetechnologyandtrackrecords. Secondly, we should make use of “unconventional” re-sourcesthathaveremaineduntappedtodate.Inthisarea,developmentisunderwayforCBMinsuchcountriesasAus-tralia,aswellasshalegasandshaleoilintheUnitedStatesandothercountries.Forshalegas,JBIChasalreadyprovidedloans to projects in the U.S. and Canada. In FY2012, JBICofferedaloantoashaleoilprojectintheU.S. Thirdly, the diversification of production technologyneedstobeconsidered.Inrecentyears,projectsarebeingplannedthattakeadvantageoffloatingLNG(FLNG)technol-ogy3wherebyproducednaturalgasisprocessedintoliquid
AprojectinCanadainwhichaJapanesecompanyparticipatesinacquiringinterestsanddevelopmentofshalegas
1. Project finance is a financing structure that relies primarily on the cash flow,whichisgeneratedbytheproject,forrepayment.Itisusedforfinancinglargeprojectsinsuchsectorsaspowergenerationandoil,gasorothernaturalresourcedevelopment.
2. Coal-bedmethane(CBM) ismethaneextractedfromandnearcoal-beds. It isdrawingattention,alongwithshalegas,as“unconventional”naturalgas.
3. FLNGisanewgasdevelopmenttechnologywherebynaturalgasfromanoffshoregasfieldisprocessedintoliquidandstoredonalargevessel,whichisequippedwithanLNGplant,thendirectlyoffloadedtoanLNGcarrierforshipment.Amongitsadvantagesoverbuildingonshoreliquefactionplantsisalowerenvironmentalimpactasthereisnoneedtolaygaspipelinesfromthegasfieldtoanonshorefacility,nortodevelopthecoastalarea.Moreover,asthefloatingLNGfacilitywiththeliquefactionplantcanbemoved,itisalsoseenashavingtremendouspotential for thedevelopmentof small andmedium scaleoffshore gas fieldswhosedevelopmenttodatehasnotbeeneconomicallyfeasible.
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ofFY2012.Atthesametime, Japan is the largest importerof LNG from Qatar. This is a good example of securing astable,long-termsupplyofLNGtoJapan,whilecontributingtostrengtheningtherelationshipbetweenthetwocountriesthrough continuous cooperation in the world LNG supplychain. Australia also accounts for about a 20% shareof LNG,60%ofcoaland70%ofironoreprocuredbyJapan.Givenitsgeographicalproximity,politicalstabilityandabundanceofvariousresources,AustraliaisoneofthecountriesincreasinglyimportanttoJapanasaresourcesupplysource.JBIChasbuiltfavorablerelationshipswithitsresourcedevelopersthroughcontinuedfinancingovertheyears.Asdescribedabove,JBIChassupportedunconventionalLNGprojectswhereCBMisusedasa rawmaterial, and in theacquisitionof interestsin coal mines by Japanese companies. Furthermore, JBICcultivated relations with state governments in FY2011 bysigningMOUsoncomprehensivestrategicpartnershipswiththeWesternAustralianGovernmentandQueenslandGov-ernment.TheseMOUsprovidefor,amongotherthings,anexchangeofinformationoninvestmentsJapanesebusinessescould make, with periodic consultations being held. Thus,theyareexpectedtoleadthelayingofthegroundworkforJapanesebusinessdevelopment. Inotheractivities,JBICsignedanMOUwiththeMinistryofFinanceofMongoliainMarch2012toenhancefinancialcooperation,includingprovisionofexportcreditlines5,withMongoliawheremineral resources, suchas coal andcop-per, are abundant. In accordance with the MOU, the twopartiesarenowexpeditingtheconsultationprocesstoward
offshore.DuringFY2012,JBICofferedaloantosupportaJapa-nesebusinessparticipatinginanFLNGprojectinAustralia.
Strengthening Multilayered Relations with Resource-Endowed CountriesItisalsoimportanttostrengthenthemultilayeredandstrate-gicrelationsoftheresource-endowedcountriesandresourcesupplierswithwhichJapanhasbuiltgood,stablerelations. Inrecentyears,oil-producingcountriesintheMiddleEasthavepushedforwardadiversificationofindustriesandinfra-structuredevelopmentintheircountriesbasedonabundantrevenuesgeneratedbyhighoilprices.Theyhavelookedtooverseasgovernmentsandcompaniesforsupportintrans-planting technologies for these purposes. In this context,economicrelationsbetweentheMiddleEastandJapanhaveshifted from a traditional, simple relationship between oilconsumersandsuppliersto“multilayered”tiesthroughthesupportofindustrialdiversificationfromenergy-relatedandinfrastructure-developmentproject cooperation, aswell asjointinvestmentsinthirdcountries. Forexample,inSaudiArabiainMarch2006,JBICprovidedaprojectfinancingloantooneoftheworld'slargestpetro-chemicalplantsbeingplannedbyastate-ownedenterprise,SaudiArabianOilCompany(SaudiAramco),tosupportjobcreationandindustrialpromotionfromtheproductionofhighvalue-addedproducts.FortheLNGprojectinQatar,JBIChassupportedanumberofkeylinksinformingtheLNGsupplychainsincetheearlystagesofitsdevelopmentinthe1980s,suchasnaturalgasfielddevelopment,LNGplantconstructionandloadingportdevelopment.InFY2012,JBICofferedaguar-anteeforthefirstyen-denominatedforeignbonds(Samuraibonds4)issuedbyQatarPetroleum(QP),therebystrengthen-ingrelationswithQPevenfurther.QatarisamajorsupplierofLNGto Japan,accounting for18%of Japan’s importsas
AcoppermineprojectinChileinvolvingparticipationofaJapanesecompany
4. Samuraibondsareyen-denominatedbonds issuedby foreign issuers suchasforeigngovernmentsandforeigncompaniesintheJapanesebondmarket.
5. Anexportcredit line isa formofexportcredit inwhich JBICcommits to themaximumamountofcredittobeextendedtoforeignbanksorotherentitiestofinanceexportsofmachinery,equipmentandservicesfromJapan.
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Denizbank A.S., Turkiye Kalkinma Bankasi A.S., RHB BankBerhad, Petróleo Brasileiro S.A. (PETROBRAS), and Bancode Bogotá S.A. to support renewable energy and energy-efficiency improvementprojects in India, Turkey,Malaysia,andtheLatinAmericanandCaribbeanregionsinaneffortforGREEN(GlobalactionforReconcilingEconomicgrowthandENvironmentalpreservation)operations( see p. 59 for details
of this initiative).Theseloansareexpectedtocontributetothereductioningreenhousegas(GHG)emissions,andhelpthediffusionofJapan'sadvancedenvironmentaltechnologiesinthesecountriesandregions.( For selected cases of environment-related operations by JBIC,
see pp. 49–50.)
JBIC's Efforts for Renewable EnergyAseffortsarebeingmadeinothercountriesaswelltopro-mote theuseof renewableenergy,businessopportunitiesareexpandingforJapanesecompanies.JBICistakingstepstosupporttheseopportunities,includingprojectfinancingforrenewable-energypowergenerationprojects inCanada inwhichJapanesecompaniesparticipate( see p. 49). JBIChasofferedexportcreditlinesforICICIBankLimitedofIndiaandfourlocalbanksinTurkey(TurkiyeIsBankasiA.S.,YapiveKrediBankasiA.S.,T.GarantiBankasiA.S.andDen-izbankA.S.)forthepurchaseofJapaneserenewableenergymachineryandequipment,notablythoseforgeothermal,windandsolarpowergeneration,therebysupportingexportsfromJapan.
theofferingofsuchexportcreditlines.DuringFY2012,JBICsignedanMOU fora comprehensive strategicpartnershipwithKazatomprom,ajointstockcompanywhollyownedbytheKazakhstangovernment.ThisMOUisaimedatidentifyingfuturecandidateprojectseligibleforJBICfinance,andjointlydevelopingrareearthandmetals. ForTurkey,whichhasbecomeincreasinglyimportantinrecentyearswithitsgeopoliticallocationthatborderswithMiddleEastern,NIS(NewIndependentStates)andEasternEuropeancountries, JBICinMarch2012guaranteeditspri-vatelyplacedSamuraibond issuetosupport thecountry’sefforttodiversifyfundingsources. In addition, although Japan and China tend to be in acompetitiverelationshipintheareaofnaturalresources,JBIChasbeenbuildinguprelationswiththeExport-ImportBankofChinaandotherChinesepolicy-basedfinancialinstitutions,asitconsiderssecuringachannelforanexchangeofinformationwithrespecttoindividualprojectsandpolicytrendswhilealsoexploringthepossibilityofcofinancingprojects.
Toward Comprehensive Development of Natural Resources
Japan has longbeenoneof the leadingbuyers of variousnaturalresourcesintheworld.Japan’srelativepositionasademandsidehasrecentlydeclined,however,asChinaandotheremergingmarketcountriesareproceedingtoengageinglobalcompetitiontoacquireresourcesagainstthebackdropofvigorouslyincreasingdemand. Underthesecircumstances,inordertohavesecureandstableaccesstovariousresources,JBICshouldnotonlysup-portacquisitionofinterestsandlong-termdeliverycontractsbyJapanesecompaniesbutalsolikeanapproachtoMiddleEasternoilcountries,proposecomprehensiveresourcedevel-opment,whichencompassesthedevelopmentofinfrastruc-tureincludingrailways,roads,ports,electricpowersystemsandrapidlyadvancingindustries,inaccordancewiththeneedsofindividualcountries.Althoughthisisonlyindirectlylinkedtoresourcedevelopment,ifJapanesecompaniesprovidetech-nologiesforhighlyefficientcoal-firedpowergenerationandreductioninenvironmentalimpact,thiscouldcontributetopowerdevelopmentandenvironmentalmeasuresinresource-endowedcountries,andcouldfurthermorehelptocreateafavorable position for acquiring interests in resources andpricenegotiationforJapan. JBICwillcontinuetoprovidefinancialsupportinvarioussectorsandthematicareas,includingsupportforinfrastruc-turedevelopmentinresource-endowedcountries,helpingtosecureastablesupplyofresourcesthatareindispensableforthesounddevelopmentoftheJapaneseeconomy.
Efforts toward GREEN OperationsDuring FY2012, JBIC provided loans to ICICI Bank Limited,
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ArenewableenergyprojectinIndia
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goalofincreasingGNIfrombothphysicalandnon-physicalaspects(exportsononehandandprojectmanagementandinvestmentontheother). ExportinganinfrastructuresystemproducesnotonlydirectbenefitsresultingfromreceiptoftheorderbutalsoindirectbenefitsintheformofanewfootholdforJapanesecompaniesandastrengthenedsupplychain.Onthedownside,however,itentailsmanychallenges.Foronething,itisoneofthesec-torsexposedtothefiercestglobalcompetition.Foranother,itinvolvesmanydifficultiesthatmaynotbeaddressedbytheprivatesectoralone.Theseincludehugebusinessriskssuchaslongpaybacktime,aswellastheneedtonegotiatewithhostcountrygovernments.Inviewofthesechallenges,theJapanesegovernment is pushing aheadwithpublic-privatepartnerships.Forexample,theInfrastructureSystemsExportStrategy,adoptedattheMinisterialMeetingonStrategyrelat-ingInfrastructureExportandEconomicCooperationinMay2013,aswellastheJapanRevitalizationStrategymentionedearlier,setoutacleargoaloftriplingthetotalvalueofordersforinfrastructuresystemsreceivedbyJapanesecompaniestosome¥30trillionby2020.ThesetwostrategiescallforsalespitchesbythePrimeMinisterandotherministers. TheInfrastructureSystemsExportStrategydividesemerg-ing market countries targeted for overseas infrastructuredevelopment into three groups: (i) China and ASEAN; (ii)SouthwestAsia,MiddleEast,RussiaandCIS,andLatinAmerica
Theglobalinfrastructuremarketcontinuestoexpandnotablyinemergingmarketcountries,driv-enbyrapidurbanization,amongotherfactors.Tappingintothishuge infrastructuredemand todrivegrowth in Japan iscalledforintworecently-releasedpol-icydocuments,bothendorsedbytheCabinetinJune2013:(i)theJapanRevitalizationStrategy(“JAPANisBACK”),and(ii)BasicPolicies for Economic and Fis-cal Management and Reform,formerly known as “HonebutonoHoshin.”Thefirstdocument,representing the growth strat-egybasedonthe“three-arrows”strategy or “Abenomics,” setsout a clear goal of increasingrealgrossnationalincome(GNI).Workingforinfrastructureproj-ectsoverseasisoneofthekeypolicies in thegrowthstrategyasitwouldhelpJapantoincreaseGNIthroughthreemajorfactors:(i)increasedexports,(ii)moreprofitsfrombusinessinvestmentoverseas,and(iii) improvedprocurementtermsforenergyandnaturalresourcesthroughthedevelopmentofinfrastructurerelatedtonaturalresources. JBICwillcontinuetoproactivelysupport Japanesecom-panies participating in infrastructure projects overseas bytaking advantage of the experience in the engagement ofsuchprojectsinarangeofsectors,includingelectricpowersystems,railways,seaports,roads,andwatersupplysystems,aswellasthetrustingrelationshipsJBIChasbuiltwithhostcountriesovertheyears.Inthisway,JBICwillconductopera-tionsinaccordancewithJapanesegovernment’spoliciesandcontributetothestabilizationoftheglobaleconomyandthedevelopmentoftheJapaneseeconomy.
Growing Infrastructure Demand Overseas and Japan’s “Infrastructure Systems Export”
It isexpected thatdemand for infrastructureoverseaswillcontinue to grow. Overseas infrastructure demand is pro-jectedto increaseatanannualrateofaround2.2%,morethan 5%, and about 4% for the power, seaports, and ICTsectors,respectively.1Suchdemandcanbemetbyprovid-ingintegrated“infrastructuresystems”thatinvolvenotonlyexportingequipmentfromJapanesecompanieswithadvancedtechnological capabilitiesbutalsoprovidingexpertise thatvariouscompaniesandlocalgovernmentshaveinthedesign-ing,construction,operation,andmaintenanceofinfrastruc-ture.Receivingorders for suchsystemswillhelpmeet the
Infrastructure Finance Group2·
1. TheInfrastructureSystemsExportStrategy,adoptedattheMinisterialMeetingonStrategyrelatingInfrastructureExportandEconomicCooperationonMay17,2013.
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ABritishhigh-speedrailwayprojectinwhichaJapanesecompanyparticipated
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◉ Power● Water■ Transport Infrastructure (ports, railways, roads, etc.)◆ Broadcasting, Telecommunication▼ Renewable Energy✚ Others
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▼
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▼
◉ ■▼◉
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■
✚ Infrastructure Fund
✚ Infrastructure Fund
▼ TSL for Renewable Energy-Related Project
The Latin Americanand Caribbean Region
■ Belt Highway Project■ Railway Project■ Cargo Railway Network
Development Project◆ Equipment Export for
Digital Broadcasting◆ Telecommunications Project▼ TSL for Renewable
Energy-Related Project
Brazil
◉ Export of High Energy Ef�cient Coal-�red Power Plant
◉ Portfolio Acquisition of Existing IPP Projects
◆ Telecommunications Network Expansion Project
▼ TSL for Renewable Energy-Related Project
▼ Funding for Renewable Energy-Related Project
Mexico
■ Panama Canal Expansion Project
Panama
◉ Hydroelectric Power Plant Project◉ Export of Water▼ TSL for Renewable Energy-Related Project
Colombia
■ Intercity Express Programme
United Kingdom
◉ Export of Gas-�red Power Generation
Morocco
■ The Port of Durban Expansion Project◉ Power Transmission and Distribution Project▼ TSL for Renewable Energy-Related Project
South Africa
■ Export for Metro Construction Project
Egypt
▼ TSL for Renewable Energy-Related Project and Equipment Export
Turkey
◉ Export of Gas-�red Power Generation Plant
Kazakhstan
◉● IWPP Project◉ IPP Project
UAE
◉● IWPP Project◉ IPP Project
Qatar
■ Port Expansion Project◉ IPP Project◉● IWPP Project
Oman
● Water Supply and Sewerage System Operation Project
Maldives
◉ Export of Hydro Power Generation Facilities
Sri Lanka
◉ Equity Participation in Acquiring Shares of Senoko Power Limited
● Export of Seawater Desalination Plant
Singapore
◆ Export of Telecommunication Machinery and Equipment◉ IPP Project◉ Submarine Cables Replacement Project◉ Export of Transmission and Substation Equipment
✚ Infrastructure Fund
Emerging Market Countries in Southeast Asia
Indonesia
North America and European Region
Emerging Market Countries in Asia
◉ Natural Gas-Fired Combined Cycle Power Plant Project
Thailand
◉ Export of Gas-�red Power Generation Plant
Viet Nam
◉ Portfolio Acquisition of Existing IPP Projects
The Philippines
■ Delhi-Mumbai Industrial Corridor (DMIC) Project
◉ High Energy Ef�cient Coal-�red Power PlantManufacturing and Sales Project and Equipment Export
▼ TSL for Renewable Energy-Related Projectand Equipment Export
India
■ Monorail Project
▼ Renewable Energy-Related Project
Canada
China
◉ Export of Gas-�red Power Generation Plant
Korea
◉ Power Transformer Manufacturing and Sales Project
Russia
▼ TSL for Renewable Energy-Related Project
Malaysia
■ Exports of Railway Cars
Venezuela
AsofJuly31,2013
(Note)AnIndependentPowerProducer(IPP)buildsandoperatesapowerplantonitsownandsellstheelectricityproducedtopowerutilities. AnIndependentWaterandPowerProducer(IWPP)buildsandoperatespowergenerationandwaterdesalinizationplantsonitsown
andsellstheelectricityandwaterproducedfromthem.
JBIC’s Financing for Infrastructure Projects
BankandtheWorldBank.
Three Challenges Japanese Companies Face in Infrastructure Projects Overseas
In implementing infrastructure projects overseas, Japanesecompaniesfacethreemajorchallenges:(i)weakpricecom-petitiveness,(ii)ashortageofversatileoperators,and(iii)thelackofschemesdesignedtoensureprojectfeasibilityonthepartofemerginganddevelopingcountries. Thefirstchallengeisreflectedininternationalcomparisonsinthetotalvalueofplantordersreceivedfromoverseas.ThefigureforJapanfellabout9%inFY2012fromayearearlier.ThoseforChinaandKorea,ontheotherhand,roseslightlyorremainedflatoverthesameperiod.Roughlyspeaking,China’svalueissixtimesasmuchasJapan’s,whileKorea’sfigureis
andtheCaribbean;and(iii)Africa.GivingtopprioritytoChinaandASEAN,thestrategystatesthatJapanwillfocusonbroad-baseddevelopmentassistance(developmentassistancethattranscendsnationalborders) forstrengtheningconnectivitywithintheASEANregionandbetweentheregionontheonehandandIndiaandBangladeshontheother.ThishighlightstheneedforinfrastructuredevelopmentinMyanmar,acoun-try that faces the Indian Ocean and serves as a strategicnodethatconnectsASEANwithIndia.Inthiscontext,JBICiscommittedtosupportingtheMyanmargovernmentinclear-ingthearrearsofpastloans,aproblem,whichstandsinthewayofextendingnewloanstothecountry.JBICtookthefirststepinJanuary2013whenitofferedbridgeloans(short-termbridgingloans)totheMyanmargovernmentinordertoassistitinclearingthearrearsofloansfromtheAsianDevelopment
23
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internationalalliancesorbuyoutsofforeignbusinessesthatwillhelpthemaccumulateexpertise. Thethirdchallengeisbestrepresentedbyinfrastructureprojectsinemerginganddevelopingcountriesthatarede-signedsothatprojectownershavetobearexcessiverisks.Theserisksincludeweakprovisionsinpowerpurchaseagree-mentsregardingthedutiesonthepartofthehostcountrygovernmentsand/or their agencies, aswell as inadequateminimum income guarantees in transport projects. It hap-penssometimethat,inprojectsthatinvolvesupervisionand/orinvolvementbymorethanonecompetentauthorityandthosethatcovermorethanonelocalgovernment,itwouldbedifficultforthecentralgovernmenttoensurecoordinationamongdifferentpartiesandsuperviseprojects. Intheeyesofprospectiveprivatecontractors,thisstateofaffairsbearswitness to less feasibleproject schemes,hinderingprivateinvestment. An effective approach to ensuring adequatelyfeasibleprojectschemesinemergingmarketcountriesisforthepublicandprivatesectorsinJapantoworktogethertofullycommunicateandcooperatewithactualandpotential
three timesasmuch.2 Toboost theprice competitivenessof Japanesecompanies, itmaybeoneof solutionsnot tosticktothe“AllJapan”principleofmobilizingonlyJapaneseentitiesbuttoadoptthe“JapanInitiative”strategy.Underthisstrategy,thecorepartofaplantwillbemanagedbyJapanesecompanieswithatechnologicalcompetitiveedgewhiletheotherpartswillbemanagedincooperationwithpartnersfromothercountries,inordertoachievethebestmixofJapaneseandforeignproducts. Thesecondchallengeismostevidentinwaterandrailroadsectors,inwhichtheknowledgeandexpertiseaccumulatedfromexperience inoperationswithin Japanaredistributedamong different enterprises, including public corporations,dueinlargeparttotheexistinginstitutionalarrangements.FewJapanesecompanieshaveatrackrecordofintegratedbusinessoperationsrangingfrom“upstream”operations,suchasthedevelopmentofmasterplans,to“downstream”opera-tions,suchastheoperationandmaintenanceoffacilitiesandthecollectionofchargesandfares.Forthesereasons,Japa-nesecompaniesarenotalwaysabletoadequatelymeettheneedsofhostcountriesthatcallforintegratedinfrastructuresystems.InsectorswhereJapanesecompanieslackexpertiseinintegratedbusinessoperations,itmaybeviabletopromote
2
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2. Infrastructure Finance Gro
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TheexportofequipmentbyaJapanesecompanyforapowergenerationprojectinMorocco
2. JapanMachineryCenterforTradeandInvestment,2012NendoKaigaiPurantoEnjiniaringu(PE)SeiyakuJissekiChosaHokoku(reportonconcludedcontractsforplantengineeringoverseasforFY2012),July2012.
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JBIC Annual Report 2013
the framework of regular dialogue with the host countrygovernment—arebestrepresentedbytwoschemes.OneisequityparticipationintheDelhiMumbaiIndustrialCorridorDevelopmentCorporationLimited(DMICDC),whosedutiesinclude,amongothertasks,preparingdevelopmentmasterplansfortheareassituatedbetweenDelhiandMumbaiandconductingfeasibilitystudiesforindividualprojectsthere.TheotheristheFinancialPolicyDialoguebetweenJBICandthegovernmentofIndonesiaandothercountries. JBICisconsideringapplyingthesetwoschemestoothercountries.(Forthesecondscheme, JBIChasalreadyput inplaceasimilarframeworkfordialoguewiththegovernmentsofMexicoandVietNam.)Aspartofefforts toensure thefeasibilityofinfrastructureprojectswithalongpayouttimeandwhoserevenuesarereceivedinlocalcurrency,JBICoffersloansinlocalcurrencies inordertoreduceexchangerisksforJapaneseprojectownersassociatedwithforeigncurrencyborrowingandthussupportlong-termoperations( see p.
65). As an entity that coordinates the needs of public andprivatesectors,JBICwillcontinuetosupportJapanesecom-panies inavarietyofaspectssothatthegrowingdemandforinfrastructureoverseaswillcreateandincreasebusinessopportunitiesforthem.
partnersinthesecountries.Suchpublic-privatepartnershipscanmakeitpossibleforinvolvementinactivitiesofthehostcountrygovernmentand/or localbusinesscorporationsasearlyastheprojectformulationphasethroughtheestablish-mentofabusinessaimedatpromotingprojectformulationorwithin the frameworkof regulardialoguewith thehostcountrygovernment.ThiswillallowtheJapanesesidetoof-ferappropriatesupporttothehostcountrygovernment insuchaspectsasthecontentofmajorprojectcontractsandtheframeworkforimplementingandsupervisingprojects.Itwillalsoallowfortheadoptionoflifecyclecostsandotherbidding criteria that are favorable to Japanese companies.TheseactionswillinturnimprovetheprospectsforprojectsthatbuildonthestrengthsofJapanesecompaniesinmeetinglocalneeds.
Supporting “Infrastructure Systems Export” to Overcome Challenges Facing Japanese Companies
ExpectationsarerisingforJBICtoplayanimportantroleaspartofgovernmenteffortstoboosttheexportsofinfrastruc-ture systems. JBIC is striving to help Japanese companiesovercomechallengestheyface. JBIC’seffortstoensureprojectfeasibilitythroughpublic-privatepartnerships—notably throughtheestablishmentofabusinessaimedatpromotingprojectformulationorwithin
2
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2. Infrastructure Finance Gro
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AThaiprojectforanaturalgas-firedcombinedcyclepowerplantinwhichaJapanesecompanyparticipated(aboveandright)
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Industry Finance Group3·
Overview of the Japanese EconomyWhiletheimpactoftheGreatEastJapanEarthquakeinMarch2011lingered,theJapaneseeconomyshowedamildrecoveryinthefirsthalfofFY2012.InthemiddleofFY2012,itbegantoweakenduetotheslowingglobaleconomyandtheap-preciationoftheyen.However,alongwiththeinfluenceoftheglobaleconomyrecovery,theleveling-offofexportsandindustrialproduction,andimprovedconsumerandcorporatesentimentssuggestthattheJapaneseeconomywasgradu-allyheadingtowardapick-upinthesecondhalfofFY2012.TheJapanesegovernmenthasrecentlyannouncedtheJapanRevitalizationStrategy.Thisstrategy,decidedbytheCabinetinJune2013,callsfor,amongotherthings,measuresdesignedtosupportJapanesecompaniestoexporttheirproductsandevenexpandtheiroperationsoverseas.ByrevitalizingJapa-nesecompanies,throughthestrategy,theJapanesegovern-mentaimstoputtheJapaneseeconomyonagrowthtrack.
Overview of Overseas Business Operations by Japanese Companies
Overview of FDI by Japanese CompaniesForeignDirectInvestment(FDI)byJapanesecompaniesfellinbothFY2009andFY2010afterpeakinginFY2008beforetheLehmanShock.InFY2011,itrosetoaround¥10.1trillion,a108.2%increasefromFY2010.ThefigurelargelyremainedflatinFY2012,ormoreprecisely,itdipped0.8%year-on-year,standingatabout¥10.0trillion(seeFigure1). 1. MinistryofFinance,“Outward/InwardDirectInvestment.”
AJapanesemanufacturerandmarketerofmotorcyclepartsandconstructionmachineryinIndonesia(BanshuElectricCo.,Ltd.)
2
Figure 1 Foreign Direct Investment by Japanese Companies
0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
(FY)
(Trillions of yen)
05 06 07 08 09 10 11 12[Source]MinistryofFinanceJapan
The Environment Surrounding JBIC
and Its Challenges
3. Industry Finance G
roup
A closer look at the trends in FY2012 shows that FDIjumped54.9%inthefirstquarterfromthesameperiodayearearlier.Itdropped33.9%and8.5%year-on-yearinthesecondandthirdquarters,respectively,amidgrowinguncertaintysur-roundingtheU.S.economyandtheslowdownofemergingeconomies,includingChina.Inthefourthquarter,however,FDIrose15.0%onayear-on-yearbasisastheJapaneseandglobaleconomyshowedagradualrecoverytrend.ThisisasignthatFDIispickingup1. Japanesecompanieshaveremainedcommittedtoexpand-
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JBIC Annual Report 2013
theyenfromFall2012andariseinthetotalbuyoutvolume,resultingfromtherecoveryofstockpricesintheU.S.market(Figure3).ItisexpectedthattheneedforoverseasM&AbyJapanesecompanieswill remainstrongas theyaimto tapintooverseasmarket.
ExportsTotalexportsbyJapanesecompanies,whichslowedinthefirsthalfofFY2012,arenowbeginningtoshowsignsofre-covery.AcloserlookatthetrendsinFY2012showsthat,thefigureamountedto¥16,443.6billioninthefirstquarter,up4.8%fromthesameperiodayearearlier,partlybecausetheimpactof theflooddisaster inThailandsubsided tosomeextent. Despite this sign of recovery, the figure fell in thetwoconsecutivequartersthatfollowedduetothefalteringJapaneseandglobaleconomyandtheappreciationof theyen.Itstoodat¥15,714.5billionordown8.2%year-on-yearinthesecondquarter,and¥15,429.7billionordown5.5%year-on-year in the thirdquarter.Thedecreasewasattrib-
ing theiroverseasoperationsover themid-term.ThisviewissubstantiatedbytheFY2012Survey(the24th)ReportonOverseas Business Operations by Japanese ManufacturingCompanies,which JBICconductedbetweenJulyandOcto-ber2012.Inthissurvey,towhich613companiesresponded,84.4%oftherespondentssaidtheywouldstrengthenand/orexpandtheiroverseasbusinessesinresponsetothequestionregardingtheirmedium-termbusinessprospects.Thefigurewas 72.5% as far as mid-tier enterprises, as well as smallandmediumenterprises(collectively“SMEs”),areconcerned(Figure2).
Overseas M&A by Japanese CompaniesDuringFY2012,Japanesecompaniesremainedactiveinmerg-ingandacquiringforeignfirmsfromFY2011.ThenumberofM&AcasesofforeignfirmsbyJapanesecompaniesinFY2012amountedto501,anincreaseof27fromayearearlier,al-thoughthefigureforthefourthquarterstoodat104,ade-creaseof14year-on-year,dueinparttothedepreciationof
(Note)1.“Overseasoperations”isdefinedasproduction,sales,andR&Dactivitiesatoverseasbases,aswellastheoutsourcingofmanufacturingandprocure-mentoverseas.
2.Thenumbersintheparenthesesabovethebargraphsindicatethenumbersofrespondingcompaniestothequestion.
3.Mid-tierfirms/SMEsarecompanieswhosepaid-upcapitalislessthan¥1billion.
[Source]ResultsoftheJBICFY2012SurveyReportonOverseasBusinessOperationsbyJapaneseManufacturingCompanies
2
Figure 2 Medium-term Prospects (next 3 yrs. or so) for Overseas Operations
Total responding companies Mid-tier firms/SMEs
FY2012FY2008 FY2009 FY2010 FY2011
(588) (153)0.9% 1.3%
14.8% 26.1%
72.5%
84.4%
(611) (149)0.7% 0.7%
20.1% 30.2%
69.1%
79.2%
(611) (161)2.0% 2.5%
32.2% 44.7%
52.8%
65.8%
(594) (156)0.7% 0.6%
16.5% 28.2%
71.2%
82.8%
(586) (163)0.2% 0.0%
12.6% 21.5%
78.5%
87.2%
■ Scale back/w
ithdraw
■ Maintain p
resent level
■ Strengthen/expand
Figure 3 Number of Overseas M&As by Japanese Companies
FY2012FY2008 FY2009 FY2010 FY2011
(Number of cases)
0
40
80
120
160
1Q 4Q3Q2Q
145 102 150 104
FY2012
129 111 116 118
FY2011
The Environment Surrounding JBIC
and Its Challenges
3. Industry Finance G
roup
[Source]RECOFDATACorporation
27
JBIC Annual Report 2013
extendedaThaibaht-denominatedloanforthemanufacturingandsalesofautoparts,aswellasaloaninIndonesiarupiah—thefirstofitskindbyJBIC—forthemanufacturingandsalesofautomobileandmotorcycleparts.
Supporting Ship and Plant ExportsJBIC is also committed to supporting exports by Japanesecompanies.DuringFY2012,suchsupportwasprovidedfortheexportofshipssuchasbulkcarriers,tankers,andseabedexploringships,aswellasforplantexportsinvolvingmachinetools,compressors,andotherequipment.
Supporting Overseas Business Operations by SMEs ThesuperiortechnologicalcapabilitiesofJapaneseSMEsaregiven high marks both at home and abroad. At the sametime,developingcountriesthemselvesarefocusingeffortsonattractinginvestmentfromcompaniesthathavesophisticatedtechnologies.However,JapaneseSMEsoftenhaveonlylim-itedaccesstofinancingandinformationnecessaryfortheirbusinessoperationsoverseas.Toboosttraditionalsupportforsuchoperations,JBICinFY2012setupatitsHeadOfficeandWestJapanOfficeaunitspecializinginthesupportofoverseasbusinessdevelopmentofSMEs.DuringFY2012,JBICcommittedatotalof34cases.Inadditiontofinancialsupport,suchasloans,JBICalsooffersinformationonarangeoftopics,includingtheforeigninvestmentclimate.DuringFY2012,JBICsignedamemorandumofunderstanding(MOU),separatelywiththreelocalbanksinthedevelopingworld,tosupportoverseas business operations of SMEs through Japaneseregional financial institutions under the “three governmentoffices’jointpolicy2.”Atotalof46JapaneseregionalfinancialinstitutionssignedpartnershipagreementsduringFY2012withlocalbanks indevelopingcountriesbasedonsuchMOUs.
utedparticularlytoafallinexportsbothtoAsiancountries,experiencinganeconomicslowdown,andtotheEuropeanregion, where countries struggled with fiscal problems. Inthe fourth quarter, however, the figure reached ¥16,352.6billion,up1.2%onayear-on-yearbasis,duetorecoveryinthe Japaneseandglobaleconomyandthedepreciationoftheyen.ItsuggeststhattotalexportsbyJapanesecompaniesbottomedout(Figure4).
Overall Commitments in Loan, Equity Participation, and Guarantee by the Industry Finance Group in FY2012
Inviewofthesituationandindustrytrendsalreadydescribed,JBIChassupportedJapanesecompaniesintheirbusinessop-erationsoverseasthroughvariousaspectstomaintainandim-provetheinternationalcompetitivenessofJapaneseindustries.JBIC’sIndustryFinanceGrouphadatotalof151commitmentsconcerningloan,equityparticipation,orguaranteeinFY2012.
Supporting Foreign Investment by Japanese Companies
JBICfocusesonsupportforoverseasinvestmentbyJapanesecompanies.JBICprovidesthesecompanieswithequipmentfundingfortheiroverseasbusinessesandfundsforsalesfi-nancingbytakingadvantageofschemesasnecessary,includ-ingprojectfinancingandlocalcurrency-denominatedfinanc-ing.DuringFY2012,suchloanswenttoprojectsconductedbymanufacturersinchemical,automobile,electricalmachinery,andotherindustriesaswellasengineeringfirms.AloanwasalsoprovidedtosupportanFPSO(floatingproduction,storageandoffloadingsystem)charteringproject. The“RebirthofJapan:AComprehensiveStrategy”andtheJapanRevitalizationStrategy,bothdecidedby theCabinetin2012and2013,respectively,callforthestrengtheningoflocalcurrency-denominatedfinancialsupporttofacilitatelo-calcurrencyfundingforJapanesecompaniesexpandingtheirbusinessoperationsoverseas.Inlightofthesepolicydevelop-mentsandtheneedsofJapanesecompanies,inFY2012,JBIC
2
The Environment Surrounding JBIC
and Its Challenges
3. Industry Finance G
roup
AJapanesemanufacturerandmarketeroffilmsfordisposablediapersinIndonesia(YAMATOGAWASHIKOCo.,Ltd.)
Figure 4 Value of Exports by Japanese Companies (FY2012)
(Trillions of yen) (%)
15.0
15.5
16.0
16.5
-10
-8
-6
-4
-2
0
2
4
6
1Q 4Q3Q2Q
4.8%
-8.2%
-5.5%
1.2%
16.4 15.7 15.4 16.3
Export value in 2012
Year-on-year percent change
[Source]MinistryofFinanceJapan
2. The“threegovernmentoffices’jointpolicy”referstothepolicythatwassetforthin2010jointlybytheFinancialServicesAgency,theMinistryofFinance,andtheMinistryofEconomy,TradeandIndustry.ThispolicyisaimedatsupportingSMEsintheexpansionoftheirbusinessoperationstoAsiaandelsewherebydevelopingandstrengtheninga frameworkforsuchsupportthroughcoordinationamongJapanesefinancial institutions, the JapanExternalTradeOrganization (JETRO),andJBIC.
28
JBIC Annual Report 2013
agriculture,aerospace,disastercontrol,marineinfrastructure,Ecocity, etc.). In line with the Japan Revitalization Strategyandothergovernmentstrategies,JBICwilladdresstheneedsof Japanesecompaniesbydrawingona rangeoffinancialinstruments.
TheselocalbanksincludethosewithwhichJBIChadsignedMOUsearlier.( See pp. 66–67)
Taking Appropriate Actions in Response to the Government’s Growth Strategy and the Needs of Japanese Companies
JBICwillcontinuetoworktomaintainand improvethe in-ternationalcompetitivenessofJapaneseindustriesbytakingactionsthataddresschallengesJapanesecompaniesfaceinexpandingtheiroperationsoverseasandtoconductopera-tionsinaccordancewiththegovernment’sgrowthstrategyknownastheJapanRevitalizationStrategy.Thisstrategycallsfor,amongotherthings,encouragingJapanesecompaniestoinitiateandexpandtheirbusinessoperationsoverseaswiththeaimtobecomegloballeadingcompanies,aswellastopromotetheexportofinfrastructuresystemsforthepurposeoftappingintoforeigndemand.SpecificmeasuresidentifiedinthestrategyincludeassistingJapanesecompanies,includingSMEs,inmergingandacquiringforeigncompanies,develop-ingemergingmarkets selectively, and supportingoverseasbusinessdevelopment innewfrontiersectors(healthcare,
2
The Environment Surrounding JBIC
and Its Challenges
3. Industry Finance G
roup
TheexportofatankbuiltbyaJapaneseshipbuilder
29
JBIC Annual Report 2013
3Examples of Business Outcomes
in FY2012
1 Examples of Business Outcomes by Region 32
2 Examples of Business Outcomes Relating to
Support for SMEs 47
3 Examples of Business Outcomes Relating to
the Environment 49
4 Examples of Business Outcomes Relating to Studies, and Collaboration with
Overseas Government Organizations and
International Organizations 51
31
JBIC Annual Report 2013
Examples of Business Outcomes by Region1·
JBICsignedasetofagreementstoprovideaguaranteeforyen-denominatedforeignbonds(Samuraibonds1) issuedinJapanbytheGovernmentofIndonesia(GOI).ThisisthethirdSamuraibondissuancebyGOI,andthecontinuedsupportforthisbyJBICwillhelpGOIdiversifyitsfundingsourcesandcontributetothestableeconomicmanagementofIndonesia.ItwillalsofurtherenhancetheclosebilateraltiesbetweenJapanandIndonesia.
JBICsignedabuyer’scredit2agreementwithGOI.GOIwillal-locatetheloanfundstothestate-ownedpowercompanyPT.PLN(Persero)forpurchasingpowerequipmentfromMarubeniCorporationforuseinestablishingpowersubstationsandlay-ingundergroundcablesintheIndonesiancapitalofJakarta.ByfacilitatingtheintroductionofhighlyreliableJapanesepowersupply infrastructure technologies, this buyer’s credit willcontributetoamorestablepowersupplyinJakarta.
JBICsignedaloanagreementwithPT.KorintigaHutani(KTH),anIndonesiansubsidiaryofOjiHoldingsCorporation.Thisloanwill financeawoodchipmanufacturingand salesprojectbyKTHusingtimberfromplantationforestsinCentralKalimantan,Indonesia.Worldwoodchipsupplyanddemandisexpectedtotightenoverthemediumtolongtermasdemandforpaperexpandswitheconomicgrowthinemergingmarketcountries.ThisloanwillhelpJapanesecompaniestosecurealong-termandstablesupplyofwoodchipsfromplantationforests.
Guarantee for Privately Placed Samurai Bonds Issued by the Government of Indonesia:Supporting Diversification of the Indonesian Government’s Funding Sources and Invigoration of the Samurai Bond Market
Buyer’s Credit for Exporting Transmission and Substation Equipment:Supporting the Export of Power Infrastructure Equipment by Japanese Companies
Loan for Woodchip Manufacturing and Sales Project:Supporting Japanese Companies to Secure Long-term Stable Woodchip Supply
1. Samuraibondsareyen-denominatedbondsissuedbyforeignissuerssuchasforeigngovernmentsandforeigncompaniesintheJapanesebondmarket.2. Abuyer’screditisaloanJBICdirectlyextendstoaforeignimporter(buyer)tofinanceitsimportofmachinery,equipmentorservicesfromaJapanesecompany.
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
Indonesia
Asia
IndonesiaIndonesia
32
JBIC Annual Report 2013
JBICsignedaloanagreementwithGOIestablishingacontin-gentfacility.ThiscontingentfacilityisdesignedtostrengthenGOI’scapacitytodealwithvolatilityinglobalfinancialmarketsandsupportGOImeasures forenhancing thestabilityanddurabilityoftheIndonesianeconomyincooperationwiththeWorldBank,theAsianDevelopmentBank,andtheAustraliangovernment.EnhancingIndonesia’screditstandinginglobalfinancialmarketsandimprovingthestabilityoftheIndonesianeconomywillcontributetothefinancialstabilityinJapanandtheentireAsianregion.
JBICprovidedbridgeloanstotheGovernmentofMyanmarso that it could clear its debt arrears owed to the AsianDevelopment Bank (ADB), and International DevelopmentAssociation(IDA),oneoftheWorldBankGroup.Afterclearingthedebtarrears,theGovernmentofMyanmarreceivednewloansfromADBandIDAforsocialandeconomicdevelop-ment.ThenormalizationofMyanmar’srelationswithinterna-tionalorganizationsthroughthesebridge loans isessentialforMyanmar’sreturntotheglobalfinancialmarket,andwillcontributetothestabilityandgrowthofMyanmarandtheneighboringarea.
JBICsignedaprojectfinance3loanagreementwithGulfJPUTCo.,Ltd.(GUT),aThaisubsidiaryofElectricPowerDevelopmentCo.,Ltd.fortheUtaiNaturalGas-FiredCombinedCyclePowerPlantProject.Underthisproject,GUTwillbuildandoperateanaturalgas-firedcombinedcyclepowerplant,andsellthegeneratedelectricitytotheElectricityGeneratingAuthorityof Thailand. This is a significant project for local Japanesesubsidiariesasitwillprovidethemwithastablepowersupply,andinadditiontoadvancing infrastructuredevelopment inThailand,itwillalsomakeabroad-rangingcontributiontotheoverseasbusinessoperationsofJapanesecompanies.
Establishment of a Contingent Facility for the Government of Indonesia:Preparation against Volatility in Global Financial Markets
Bridge Loans to the Government of Myanmar:Contributing to the Medium to Long Term Development of Myanmar through Support for Its Return to the Global Financial Market
Project Finance for a Natural Gas-Fired Combined Cycle Power Plant Project:Supporting Japanese Participation in a Power Infrastructure Project
3. Projectfinanceisafinancingstructurethatreliesprimarilyonthecashflowgeneratedbytheprojectforrepayment.Itisusedforfinancinglargeprojectsinsuchsectorsaspowergenerationandoil,gasorothernaturalresourcedevelopment.
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
Indonesia
Asia
ThailandM
yanmar
33
JBIC Annual Report 2013
India
Asia
ThailandA
SEAN
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBICsignedaloanagreementwithJuthawanMolitec(Thailand)Co.,Ltd.(JWM),aThaisubsidiaryofMOLITECSTEELCO.,LTD.MOLITECSTEELmanufacturespartsforcontinuouslyvariabletransmissionsattheJWMplantinChonburiProvinceforsaleinthedomesticThaimarketandinthirdcountries,andthisloan,inThaibaht,willenablethecompanytoexpandandupgradeitsmanufacturingfacilitiesandequipmenttomeetthegrowingdemandforautomobilesinemergingmarketcountries.TheloanwillalsohelptheJapaneseautomobilepartsindustrytomaintainandimproveitsinternationalcompetitiveness.
JBICagreedtoequityparticipationintheprivateequityfundMizuhoASEANPEFund,managedbyMizuhoAsiaPartnersPte.Ltd.(FundManager),awhollyownedSingaporeansub-sidiaryofMizuhoBank,Ltd.TheFundisstructuredtoprovidefinancetolocalcompaniesintheASEANregionasameansofsupportingtheexpansionofmid-tierenterprisesandsmallandmediumJapaneseenterprises(collectively,“SMEs”)intotheASEANregion.Tothisend,theFundManagerwilluseitsnetworks inASEANto identifypotential investments,whileMizuhoBank,Ltd.andJBICwillprovidecooperationandsup-porttoJapanesecompaniesincludingSMEs.
JBICestablishedacredit line for ICICIBankLimited, India’slargestprivatebankintotalassets.Thecreditlineisextendedunder theGREEN (Global action for Reconciling EconomicgrowthandENvironmentalpreservation)operationstopro-videnecessaryfundingforenvironment-relatedprojectsthatcancontributetoareductioningreenhousegasemissionsin India,and isexpectedtogive furthermomentumtotheenvironmentalpoliciesadoptedbytheIndiangovernment.
Loan for Automobile Parts Manufacturing and Sales Project:Providing Local Currency Loans to Support Japanese Company’s Operations in Thailand
Equity Participation in a Fund to Support Expansion of Japanese Companies into the ASEAN Region:Supporting the Overseas Business Deployments of Japanese Companies Including Mid-tier Enterprises and Small and Medium Enterprises
Credit Line for India’s Largest Private Bank under the GREEN Operations:Supporting Renewable Energy and Energy Efficiency Projects
34
JBIC Annual Report 2013
India
Asia
Kazakhstan
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBIC signed a buyer’s credit agreement with GAIL (India)Limited(GAIL).ThisloanwillenableGAILtoprocureplant-relatedequipmentfromJapanesecompaniessothatitcanincreaseproductioncapacityat itspetrochemicalplants inIndia.Itwillalsocontributetocreatingbusinessopportuni-tiesforJapanesecompaniesinthepetrochemicalsectorinIndia,andhelpthesecompaniestomaintainandimprovetheirinternationalcompetitiveness.
JBICsignedabuyer’screditagreementwithLLPAtyraurefinery(AR),asubsidiaryoftheKazakhstanstate-ownedoilandgascompanyJSCNCKazMunayGas.ARismodernizingtheAtyrauOilRefinerytominimizeitsenvironmentalload,andthisloanwillbeusedbythecompanytopurchaseplantequipmentthroughMarubeniCorporationasapartofthismoderniza-tionproject.The loanwill leadtothecreationofbusinessopportunitiesforJapanesecompaniesintheoilrefineryandpetrochemicalsectorsinKazakhstan,andthroughthis,helpJapaneseindustriesmaintainandimprovetheirinternationalcompetitiveness.
Buyer’s Credit for Indian Company:Supporting the Export of Petrochemical Plant-related Equipment by Japanese Companies
Buyer's Credit for Oil Refinery Modernization Project:Supporting the Export of Environment-friendly Plant Equipment by Japanese Companies
35
JBIC Annual Report 2013
4. FloatingLNG(FLNG)isanewgasdevelopmenttechnologywherebynaturalgasfromanoffshoregasfieldisprocessedintoliquidandstoredonalargevessel,whichisequippedwithanLNGplant,thendirectlyoffloadedtoanLNGcarrierforshipment.Amongitsadvantagesoverbuildingonshoreliquefactionplantsisalowerenvironmentalimpactasthereisnoneedtolaygaspipelinesfromthegasfieldtoanonshorefacility,nortodevelopthecoastalarea.Moreover,asthefloatingLNGfacilitywiththeliquefactionplantcanbemoved,itisalsoseenasapotentialtoolforthedevelopmentofsmallandmediumscaleoffshoregasfieldswhosedevelopmenttodatehasnotbeeneconomicallyfeasible.
Australia
Oceania
Australia
Australia
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBIC signed a loan agreement with Marubeni Iron OreAustraliaPty.Ltd.(MIOA),anAustraliansubsidiaryofMarubeniCorporation.The loanwillprovide thenecessary funds forMIOAtoacquireinterestsintheRoyHillIronOreMineProject,operatedby theAustralian companyRoyHill Holdings PtyLtd(RHH)withcapitalfromMarubeniCorporationandotherforeign companies, and undertake mine and mine-relatedinfrastructuredevelopment.RoyHillMineproduceshigh-gradeironore,sotherearehighexpectationsamongJapanesesteelmillsinparticularthatthisprojectwilleventuallyprovidethemwithastablesupplyofthishigh-gradeironore.
JBIC signed a loan agreement with INPEX CORPORATION(INPEX).This loanwillprovide thenecessary funds for theAustraliansubsidiaryof INPEXtoacquireapart interest intheblock containingAustralia’s Prelude gas field from theAustraliansubsidiaryofRoyalDutchShell,andtoextractnatu-ralgasandprocessitintoLNGusingfloatingLNGtechnology4.ByfinancingparticipationbyINPEXintheworld’sleadingfloat-ingLNGproject,theloanwillcontributetoINPEX’sacquisitionoffloatingLNG-relatedknow-howandexpertise.
JBIC has signed a memorandum of understanding (MOU)on a comprehensive strategic partnership with WoodsidePetroleumLtd. (Woodside),Australia’s largest independentoilandgascompany.HavinglongcontributedtoLNGsupplyto Japan,Woodside isastrategically importantpartner forJapan’senergyresourcestrategy.Closeexchangesofinforma-tionandviewsbetweenthetwopartiesunderthisMOUareexpectedtocreateopportunitiesforJapanesecompaniestoparticipateinenergyprojects,thuscontributingtoastableLNGsupplytoJapan.
Loan for Acquisition of Interests in and Development of an Iron Ore Mine Project:Supporting Japanese Companies to Secure Mineral Resources and Participate in Large Scale Overseas Iron Ore Mine Development
Loan for Acquisition of Interests in and Development of a Floating LNG Project:Supporting Japanese Company’s Participation in a Floating LNG Project
JBIC Signs an MOU on a Comprehensive Strategic Partnership with Woodside Petroleum Ltd. in Australia:Supporting the Creation of Business Opportunities for Japanese Companies to Participate in Energy Projects by Establishing a Partnership with Australia’s Largest Independent Oil and Gas Company
36
JBIC Annual Report 2013
Australia
Oceania
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBIC signeda loanagreementwithSumishoCoalAustraliaPty Limited (SCAP), an Australian subsidiary of SumitomoCorporation.This loanwillprovidethenecessary fundsforSumitomoCorporation toacquirean interest inAustralia’sIsaacPlainsCoalMinethroughitsAustraliansubsidiary.Thecoalextracted fromtheminehasmainlybeensupplied toJapanesesteelmillsonanongoingbasis,andtheacquisitionoftheinterestinthemineisexpectedtoresultinanincreasein thevolumeofcokingcoalandthermalcoalsuppliedtoJapanesecompaniesfromthemine.
Loan for Acquisition of Coal Mine Interests:Contributing to Japan’s Securing Energy Resources and a Stable Energy Supply
37
JBIC Annual Report 2013
5. 3Dmarineseismicdataacquisitionvesselsareequippedfor3Dgeologicalstratumanalysis.Thevesselsreceivepressurewavereflectionsfromtheoceanfloororsub-surfaceregionthroughsensorsintowedcablesfor3Danalysisofthegeologicalstructureoftheoceanfloor.
IrelandN
orway
Europe
United K
ingdom
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBICsignedaprojectfinanceloanagreementwiththeU.K.companyAgility TrainsWest Limited, a consortium ledbyHitachi,Ltd.,tofundtheIntercityExpressProgramme(GreatWesternMainLine).ThisisoneofthemajorprojectsoftheBritish government, and is expected to make a significantcontributiontothelong-termandstableprovisionofrailwayservicesintheU.K.
JBICsignedaloanagreementwiththeIrishcompanySMBCAviationCapitalLimited,SumitomoMitsuiFinanceandLeasingCompany, Limited (SMFL), and Sumitomo Corporation toprovidefundsforthejointacquisitionbythethreeJapanesecompaniesofSMFL,SumitomoMitsuiBankingCorporationandSumitomoCorporationofanaircraftleasingbusinessoper-atedundertheRoyalBankofScotland(RBS),aBritishbank.Throughthisacquisition,thethreeJapanesecompaniesplantotackletheexpandingdemandforcommercialaircraftwiththeincreasingvolumeofairtravelersfollowingthegrowthinemergingmarketsandtheriseoflow-costcarriers.
JBICsignedtwobuyer’screditagreementsforshipexportwithPGSTitansAS (PGSTITANS),awhollyownedship-holdingsubsidiaryoftheleadingNorwegianseismicserviceprovider,PetroleumGeo-ServicesASA.Theloansareprovidedforthepurchaseoftwo3Dmarineseismicdataacquisitionvessels5to be built at the Nagasaki Shipyard of Mitsubishi HeavyIndustries,Ltd.Withthecontinuingconstraintsonshipfinanc-ingthroughouttheworld,theseloanswillhelptheJapaneseshipbuildingindustrytomaintainandimproveitsinternationalcompetitiveness.
Project Finance for an Intercity Express Programme:First Project Finance Loan by JBIC in the Railway Sector
Loan for Acquisition of an Overseas Aircraft Leasing Business:Supporting Overseas M&A by Japanese Companies
Buyer's Credit for Ship Export to Norwegian Company:Supporting the Export of 3D Marine Seismic Data Acquisition Vessels Built at a Japanese Shipyard
38
JBIC Annual Report 2013
United A
rab Emirates
The Middle East
Qatar
Turkey
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBIC has signed a set of agreements to provide a guaran-teefortheyen-denominatedforeignbondsissuedbyQatarPetroleum(QP)intheJapanesebondmarket(Samuraibonds).ThisarrangementispartofJBIC’seffortstosupporttheissu-anceofSamuraibondsbyforeignissuersintheTokyobondmarketandtherebyrevitalizetheSamuraibondmarket.Thisis the first issue of Samurai bonds by the state-owned oilcompanyofQatar.TheguaranteeprovidedbyJBICwillsup-portQP’sabilitytodiversify its fundingsources. ItwillalsofurtherstrengthenbilateralrelationswithQatar,animportantenergyresourcesupplierforJapan.
JBICestablisheda credit line forTurkiyeKalkinmaBankasiA.S.(TKB),apolicy-basedfinancialinstitutioninTurkey.ThecreditlineisextendedundertheGREEN(GlobalactionforReconcilingEconomicgrowthandENvironmentalpreserva-tion)operations toprovidenecessary fundingthroughTKBfor environment-related projects in Turkey. The expandedcooperativerelationshipbetweenthetwobanksreinforcedby this credit line is expected to provide broader rangingsupportforinfrastructureprojectsinTurkeyinwhichJapanesecompaniesparticipate.
JBIChassignedaloanagreementwithAbuDhabiNationalOilCompany(ADNOC),astate-runoilcompanywhollyownedbytheEmirateofAbuDhabi,UnitedArabEmirates(UAE).ADNOCconductsoilandgasbusinessinAbuDhabi,whichproducesmostoftheoilandgasintheUAE.ThisagreementisdesignedtofinanceADNOCtoexpandtheiroilandgasdevelopment.TheloanwillhelptosecureastablesupplyofenergyresourcestoJapanaswellastostrengthenbilateraltieswiththeUAE,astrategicallyimportantcountryforJapan’sresourcestrategy.
JBIC Guarantees Privately Placed Samurai Bonds Issued by Qatar Petroleum:Stimulating the Samurai Bond Market and Strengthening Multilayered Ties with a Resource-Supplying Country
Credit Line for Turkiye Kalkinma Bankasi A.S. under GREEN Operations:Supporting Renewable Energy and Energy Efficiency Projects
JBIC Signs a Loan Agreement with Abu Dhabi National Oil Company (ADNOC):Securing Long-Term Supply of Crude Oil and Strengthening a Strategic Partnership with the UAE
Qatar
39
JBIC Annual Report 2013
6. TheDeauvillePartnershipisaframeworkforsupportinghistoricalchangeinMiddleEastandNorthAfricannationsagreeduponattheG8DeauvilleSummitinMay2011.
United A
rab Emirates
The Middle East
Africa
TunisiaM
orocco
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBICsigneda loanagreementwithAbuDhabiOilCo.,Ltd.toprovidethenecessaryfundsforAbuDhabiOilCo.,Ltd.torenewitsinterestintheMubarrazandotheroilfieldsintheEmirateofAbuDhabi.AllofthecrudeoilAbuDhabiOilCo.,Ltd.producesinAbuDhabiisshippedtoJapan.Providingthisloantosupporttherenewaloftheoilfield interestheldbyAbuDhabiOilCo.,Ltd.isexpectedtocontributetosecuringalong-termstablesupplyofindependentlydevelopedcrudeoil,which,inturn,willcontributetoJapan’senergysecurity.
JBICsignedaprojectfinancebasedbuyer’screditagreementwiththeMoroccancompanyJorfLasfarEnergyCompany5&6S.A.Undertheproject,aconsortiuminwhichMITSUI&CO.,LTD.isparticipatingprovidestheprincipalequipmentforthecoal-firedpowerplantexpansionintheJorfLasfardistrict,andthisloanwillbeusedasapartoftheconstructioncostforthispowerplant(thesteamturbinesaremanufacturedbyMitsubishiHeavyIndustries,Ltd.,andtheboilersaremanufac-turedbyIHICorporation).Thisloanwillhelptocreatebusi-nessopportunitiesforJapanesecompaniesinMorocco,whereelectricitydemandisexpectedtoincreaseintheyearsahead.
JBICprovidedaguaranteeforyen-denominatedforeignbonds(Samuraibonds)issuedinJapanbytheCentralBankofTunisia.ThisguaranteeisapartofthesupportprovidedtocountriesintheMiddleEastandNorthAfricaundertheDeauvillePart-nership6,andisalsoJBIC’sfirstguaranteeforSamuraibondsissuedbyagovernmentofanAfricancountry.ThisguaranteewillhelptheTunisiangovernmentdiversifyitsfundingsources,andbystimulatingtheSamuraibondmarketanddeepeningbilateral relations with Tunisia. It is also expected to giveaddedmomentum to thebusinessoperationsof Japanesecompanies.
Loan for Renewal of an Oil Field Interest in Abu Dhabi:Supporting a Japanese Company in the Stable Holding of an Oilfield Interest
Buyer’s Credit for a Coal-Fired Power Generation Project:JBIC’s First Project Finance Support in Morocco
Guarantee for Privately Placed Samurai Bonds Issued by the Central Bank of Tunisia:JBIC’s First Guarantee for Samurai Bonds Issued by an African Country
United Arab Emirates
Tunisia
40
JBIC Annual Report 2013
7. AnexportcreditlineisaformofexportcreditinwhichJBICcommitstothemaximumamountofcredittobeextendedtoforeignbanksorotherentitiestofinanceexportsofmachinery,equipmentandservicesfromJapan.
Africa
Angola
African Region
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBICsignedabuyer’screditagreementwiththeGovernmentoftheRepublicofAngola.Theloanwillprovidethenecessaryfundsforthepurchaseofnecessarytextilemanufacturingmachinery(madebyToyotaIndustriesCorporation,MurataMachinery,Ltd.,etc.)fromMarubeniCorporationundertheprojectimplementedbytheAngolanMinistryofIndustryforrebuildingstate-runtextilemanu-facturingplantsinAngola.TheAngolangovernmentiscurrentlypushingaheadwithpost-warreconstructionfollowingtheendoftheprolongedcivilwar,andrebuildingthetextileindustry,whichreliesonimportsforthemajorityofitstextileproducts,asakeygovernmentplatform.TheloanwillalsohelptheJapanesetextileindustrytomaintainandimproveitsinternationalcompetitiveness.
JBICestablishedanexportcreditline7forTheDevelopmentBankofSouthernAfricatoprovidefundsforlocalcompaniesinSouthernAfricaandother regionsofAfrica topurchasemachineryandequipmentfromJapanesecompanies.ManySouthernAfricancountrieshaveanabundanceofresources,andtheireconomicgrowthfueledbyresourcesdevelopmentcontinuestoreinforcetheneedtodevelopthelocalinfrastruc-ture.Againstthisbackdrop,Japanesecompaniesarelookingtowardthesecountriesforopportunitiestoexportmachineryandequipment,andthereforehaverisingexpectationsontherolethatJBICcanplayinthisregion.
Buyer’s Credit for Exporting Textile Manufacturing Machinery:Supporting Japanese Exports of Textile Manufacturing Machinery
Export Credit Line for The Development Bank of Southern Africa:Supporting Japanese Exports to the African Region
41
JBIC Annual Report 2013
8. Coal-bedmethane(CBM)ismethaneextractedfromandnearcoal-beds.Itisdrawingattentionalongwithshalegasas“unconventional”naturalgas.
Canada
North A
merica
United States
Canada
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBICsignedaloanagreementwithToyotaTsushoCorporation.ThisloanwillprovidethenecessaryfundstoToyotaTsushoCorporation to enable its wholly owned Canadian subsid-iary—ToyotaTsushoWheatlandInc.—toacquireapartinter-est in thecoal-bedmethane (CBM)8fields inCanada fromEncanaCorporation,Canada’slargestnaturalgasproducer,forCBMdevelopment.ThisloanwillhelptoimproveJapaneseknow-howonCBMdevelopmentandraisetheratioofJapan’sindependentlydevelopedenergyresources,which,inturn,isexpectedcontributetoJapan’senergysecurity.
JBIC signed a loan agreement with INPEX CORPORATION(INPEX).ThisloanwillprovidethenecessaryfundstoINPEXtoenabletheCanadiancompanyjointlyestablishedbyINPEXandJGCCORPORATIONtoacquireapartinterestinCanadianshale gas fields held by the Canadian oil and natural gasdevelopmentcompanyNEXENInc.,anddevelopandproduceshalegas.ThisloanwillhelptoimproveJapaneseknow-howonshalegasdevelopmentandraisetheratioofJapan’sinde-pendentlydevelopedenergyresources.
JBIC signed a loan agreement with JD Rockies ResourcesLimited (JDR), a wholly owned U.S. subsidiary of ITOCHUCorporation. The loan provides the necessary funds forITOCHU Corporation to acquire equity in the U.S. oil andgas development company Samson Investment Company(Samson)throughJDR.Samsonproducesthelargestvolumeofoilandgasamongunlistedoilandgasdevelopmentcom-paniesintheU.S.,andoverthepastseveralyears,ithasalsobeendevelopingunconventionalnaturalresources.ThisloanwillalsohelptoexpandopportunitiesforJapanesecompaniestoparticipateinunconventionalnaturalresourcesdevelop-mentprojects.
Loan for Acquisition of Interests in and Development of Coal-Bed Methane:Supporting Japanese Participation in a Coal-bed Methane Project
Loan for Acquisition of Interests in and Development of Shale Gas:Supporting Japanese Acquisition of Interests in and Development of Shale Gas
Loan for Acquiring Equity in an Oil and Gas Development Company:Supporting Overseas Resources Development by Japanese Companies
42
JBIC Annual Report 2013
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
North A
merica
United States
United States
9. Unlikeconventionaloilthatisextractedfromwellsnaturallystoredinthestratum,tightoilexistswidelythroughtightstratasuchassandstone,limestoneandshaleformations,andthemethodsusedforitsextractionaresimilartothoseusedinshaleoilandgasextraction(horizontaldrilling,hydraulicfracturing,etc.).
JBICsignedaloanagreementwithSumitomoCorporationanditsU.S.subsidiarySummitDiscoveryResources IIILLC(SDRIII).ThisloanwillprovidethenecessaryfundsforSumitomoCorporationtoacquirethroughSDRIIIapartinterestinU.S.tightoil9reservesheldbytheU.S.oilandgasdevelopmentcompany Devon Energy Corporation, and to develop andproduce tightoil. Theknow-howon tightoildevelopmentgainedbyJapanesecompaniesthroughthisprojectwillleadtogreateropportunitiesforJapaneseparticipationinshaleoilandgasdevelopmentprojects,andhelptoraisetheratioofJapan’s independentlydevelopedoilresourcesthroughtheholdingoftightoilinterests.
JBICsignedaloanagreementwithJGCExplorationEagleFordLLC(JEEF),awhollyownedU.S.subsidiaryofJGCCorporation.ThisloanwillprovidethenecessaryfundsforJGCCorporationtodevelopandproduceshaleoilintheU.S.EagleFordshaleoilfields,ofwhichJGCCorporationholdsapartinterestthroughJEEF.Inviewoftheprojectedriseinshaleoilproductionintheyearsahead,theknow-howonshaleoildevelopmentgainedbyJapanesecompaniesthroughthisloanwillleadtogreateropportunitiesforJapaneseparticipationinoverseasshaleoildevelopmentprojects.
Loan for Acquisition of Interests in and Development of Tight Oil Reserves:Supporting Japanese Participation in a Tight Oil Development Project
Loan for Shale Oil Development:Supporting Japanese Participation in a Shale Oil Development Project
43
JBIC Annual Report 2013
Chile
Latin Am
erica and the Caribbean
BrazilC
hile
Cochrane Site
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBICsignedaloanagreementwithAmapáFlorestaleCeluloseS.A. (AMCEL),aBraziliancompanycapitalizedby Japanesecompanies.ThisloanprovidesthenecessaryfundsforAMCELtoplanteucalyptustreesandmanufactureandsellwoodchipssourced fromplantation forests inBrazil.Worldwoodchipsupplyanddemandisexpectedtotightenoverthemediumtolongtermasdemandforpaperexpandswitheconomicgrowthinemergingmarketcountries,andthisloanwillhelpJapanesecompaniestosecurealong-termandstablesupplyofwoodchipsfromplantationforests.
JBICsignedaprojectfinanceloanagreementwithEmpresaElectricaCochrane SpA, aChilean subsidiary ofMitsubishiCorporation,fortheCochraneCoal-FiredPowerProject.Underthispowerinfrastructureproject,MitsubishiCorporation,asanequityinvestor,willundertakealldevelopmentprocesses,fromconstructiontooperation,jointlywiththeChileancom-panyAESGernerS.A.Thisisthefirstpowerinfrastructureproj-ectinChilewithcapitalparticipationbyaJapanesecompany,andisexpectedtobecomeamodelforfutureinfrastructureprojectsinChilebyJapanesecompanies.
JBIC signed a loan agreement with Minera EscondidaLimitada(MEL),aChileancompanycapitalizedbyMitsubishiCorporation, JX Nippon Mining & Metals Corporation,MitsubishiMaterialsCorporation,BHPBillitonGroupandRioTintoGroup.Theloanwillprovidethenecessary fundsforMELtoexpanditsEscondidaCopperMine,theworld’slarg-estcoppermine,inChile,andincreaseproductionofcopperconcentrate. The copper concentrate producedbyMEL iscrucialtoJapanesecompaniesduetoitshighquality,andthisloanwillcontributetothelong-term,stablesupplyofcopperconcentratetoJapan.
Loan for Forestation, Woodchip Manufacturing and Sales Project:Supporting Japanese Companies to Secure Long-term Stable Woodchip Supply
Project Finance for a Coal-Fired Power Generation Project:Supporting the First Power Infrastructure Project by a Japanese Company in Chile
Loan for a Project to Expand the World’s Largest Copper Mine:Supporting the Long-term, Stable Procurement of Copper Concentrate by Japanese Companies
44
JBIC Annual Report 2013
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
Chile
Latin Am
erica and the Caribbean
Mexico
Mexico
JBIC signed separate loan agreements with MitsubishiCorporation,MITSUI&CO.,LTD.,andawhollyownedsubsid-iaryofMITSUI&CO.,LTD.TheloanswillprovidethenecessaryfundsforMitsubishiCorporationandMITSUI&CO.,LTD.toacquireequityinAngloAmericanSurS.A.,awhollyownedChileansubsidiaryofthemajorBritishminingcompanyAngloAmericanplc.withasubstantialportfolioofcopperassetsinChile,andalsotoacquireofftakerightsforcopperconcen-tratesetc.ThestrongercooperativerelationshipandstrategictieswithmajorminingcompaniesresultingfromthisarealsohighlysignificantforJapan’ssecuringamediumtolongtermsupplyofcopperconcentrates.
JBICsignedaloanagreementwithMazdaMotorManufacturingdeMexicoS.A.deC.V.(MMMdM),aMexicansubsidiaryofMazdaMotorCorporation.ThisloanwillprovidethenecessaryfundstoMMMdMforthemanufactureandsaleofautomobilesinMexico.MazdaMotorCorporationestablishedMMMdMinMexicoasaproductionsitetomanufactureandassemblecarsfortheimpor-tantNorthAmericanandCentralandSouthAmericanmarketswithaviewtostrengtheningitsglobalproductionnetworkandexpandingitsoverseasoperationstoincreasethelocalproductionratio,andinprovidingsupporttoMazdaMotorCorporationinitsoverseasbusinessoperations.ThisloanwillhelpJapaneseindus-triesmaintainandimprovetheirinternationalcompetitiveness.
JBICsignedaloanagreementwithNipponSteelPipeMexico,S.AdeC.V. (NPM),aMexicancompany jointlyestablishedbyNipponSteel&SumitomoMetalCorporation,SPTandSCInvestmentCo.,Ltd. (a jointventureofSumitomoPipeandTubeCo.,Ltd.andSumitomoCorporation),andMetalOneCorporation.TheloanprovidesthenecessaryfundstoNPMfor themanufactureandsaleofhighgradesteelpipes forautomobilesinMexico.InprovidingsupportfortheoverseasbusinessdeploymentofthesecompaniesinvestinginNPM,thisloanwillhelptheJapanesesteelindustrymaintainandimproveitsinternationalcompetitiveness.
Loan for Acquiring Equity in a Major Resources Subsidiary:Contributing to Securing the Medium to Long Term Stable Supply of Copper Resources to Japan
Loan for Automobile Manufacturing and Sales Project in Mexico:Supporting the Overseas Business Operations of the Japanese Automobile Industry
Loan for Automobile Steel Pipe Manufacturing and Sales Project:Supporting the Overseas Business Deployment of the Japanese Steel Industry
Mexico
45
JBIC Annual Report 2013
10.GlobalStrategicInvestmentAllianceisanallianceofmultipleinvestorsledbyOMERS,apublic-sectorpensionfundestablishedinOntario,Canada.
North A
merica and Europe
Latin Am
erica and the Caribbean
Mexico
Venezuela
Other
3
Examples of Business O
utcomes in FY
2012 1. Exam
ples o
f Business Outco
mes b
y Region
JBICpartiallyacquiredthepubliclyplacedyen-denominatedforeignbonds(Samuraibonds)issuedinJapanbytheMexicangovernment.ThisacquisitionwillhelptomaintainandincreasethepresenceofMexicangovernmentbondsintheTokyomar-ket,andprovideabroadrangeofinvestmentopportunitiestoJapaneseinvestors.JBICholdsanannualmeetingforpolicydialoguewiththeMexicangovernmentaimedatpromotingmutualcooperationanddeepeningbilateraleconomicrela-tions,andatthesecondannualmeetingheldinfiscal2012,theMexicangovernmentexpresseditsappreciationtoJBICforthispartialacquisition.
JBICsignedabuyer’screditagreementwiththeVenezuelangovernment.The loanwillprovide thenecessary funds fortheVenezuelanstate-runInstitutodeFerrocarrilesdelEstado(StateRailwaysInstitution)topurchaseJapaneserailwaycars(builtbyNIPPONSHARYO,LTD.andTOSHIBACORPORATION)fromMarubeniCorporationtorunfromthecapitalCaracastotheneighboringcityofTuyMedio.Thismass-transitpublictransportinfrastructureprojectisexpectedtohelpalleviateur-bantrafficcongestionandeasepopulationpressuresthroughthedevelopmentofneighboringcities.
JBIC agreed to equity participation in Japan InfrastructureInvestmentPartnersL.P.,afundestablishedtoinvestinlargescaleinfrastructureprojectsinNorthAmericaandEurope,andmanagedbyasubsidiaryofMitsubishiCorporation.ThroughparticipationintheGlobalStrategicInvestmentAlliance10,thefundwillinvestinairports,railways,portsandharbors,powertransmissionanddistribution,gaspipelinesandotherlargescaleinfrastructureprojectsprimarilyinNorthAmericaandEurope,andisexpectedtoexpandtheinfrastructure-relatedinvestmentopportunitiesforJapanesecorporateandinstitu-tionalinvestors.
Partial Acquisition of Publicly Placed Samurai Bonds Issued by the Mexican Government:Supporting Diversification of the Mexican Government’s Funding Sources and Invigoration of the Samurai Bond Market
Buyer’s Credit for Exporting Railway Cars:Supporting Japanese Exports of Railway Cars
Equity Participation in a Fund Investing in Large Scale Infrastructure Projects Mainly in North America and Europe:Supporting the Expansion of Infrastructure-related Investment Opportunities for Japanese Investors
46
JBIC Annual Report 2013
3
Examples of Business O
utcomes in FY
2012
Examples of Business Outcomes Relating to Support for SMEs2·
DAIHO INDUSTRIAL Co., Ltd.Manufacturing and Sales Business of Plastic Products
TOYO METAL TREATING CORPORATIONHeat Treated Metal Processing Business
Momoi Fishing Net Mfg. Co., Ltd.Manufacturing and Sales Business of Fishing Nets
NAGAOKA INTERNATIONAL CORPORATIONManufacturing and Sales Business of Plant Facility Production
TOKOKOSEN CORP.Manufacturing, Sales and Wholesale Business of Automobile Parts and Other Products
Japan Chemical Engineering & Machinery Co., Ltd.Plant Engineering Business
IndonesiaC
hina
Indonesia
China
ThailandThailand
JBICsupportsSMEsinawiderangeofindustrieswiththeiroverseasbusinessdeployment.
1. Ingasmoldingtechnology,gasisinjectedintotheplastictoformapreciseshapematchingthemold.2. Monofilamentisasinglefilamentfiber;thesinglefiberextrudedfromeachnozzleinthespinningprocessformsastrandoflinethatisusedforfishinglinesorbrushes.
2. Examp
les of Business O
utcom
es Relating to Sup
po
rt fo
r SMEs
NAGAOKAINTERNATIONALCORPORATION(NIC)haslongpossessedtop-mosttechnologicalcapacityforscreeninter-nals,whichareusedasmajorequipmentfortheimprove-ment,desulfurizationandotherprocessesinpetrochemicalplantsandrefineries.NagaokaHitachiZosenEquipment(Dalian)Co.,Ltd.,itssubsidiaryinChina,planstoproduce
andsellplantfacilities,includingthoseforpet-rochemicals, refineriesandthewater relatedsector.JBICprovidedaloantoNICforinvestinginthissubsidiary.
TOYOMETALTREATINGCORPORATION(TOYOMETAL)isengagedinmetalheattreatprocessingprimarilyforsteelrodsandothermetalmaterialsandmetalpartsusedextensivelyinautomobiles,constructionmachines,equipmentforshipsandmachinetools.TOYOMETALTREATING(CHANGZHOU)CO.,LTD,itssubsidiaryinChina,conductsmetaltreatmentforsteel
rods (to be used forsteeringwheelsystemsand other products).JBICprovidedloanstoTOYOMETALforinvest-inginthissubsidiaryandfor parent-subsidiarylending.
DAIHOINDUSTRIALCo.,Ltd.manufacturesandsellsabroadrangeofplasticproducts,includingpartsforair-conditionercabinetsandotherhouseholdelectricalappliances,andenginecoversandothermoldedplasticpartsformotorvehicles,andisaleaderinlargeinjectionmoldingandgasmoldingtech-nologies1.TheIndonesiansubsidiaryPT.DAIHOINDONESIA
manufacturesandsellsplastic products forOA equipment. JBICprovidedaloantoPT.DAIHOINDONESIAtobuildanewfactory.
MomoiFishingNetMfg.Co.,Ltd.undertakesallprocessesoffishingnetmanufacture,fromsourcingrawmaterialstothefinalfinishedproduct,andisJapan’sleadingmanufacturerofgillnets, thecompany’smainproduct,usingprimarilymonofilament2.Thecompany’s IndonesiansubsidiaryP.T.IndoneptuneNetMfg.,Co.manufacturesandsellsfishingnets,
andJBICprovidedaloantoP.T.IndoneptuneNetMfg.,Co.toacquiread-ditionalmachineryandequipment.
JapanChemicalEngineering&MachineryCo.,Ltd.(JCEM)isthefirstdeveloperofanalcoholdistillationplantinJapanandhasbeenexpandingitsscopeofbusinessfromthemanufac-tureandconstructionofvarioustypesofequipmentforthechemicalindustrytoengineeringforenvironmentally-friendlycleanerplants.NIKKAKI(THAILAND)CO.,LTD.,itssubsidiary
inThailand,isengagedinengineering business ofchemical,foodanddrink,andenergyplantmachin-eriesandequipment.JBICprovidedloanstoJCEMforinvestinginthissubsidiaryandforparent-subsidiarylending.
TOKOKOSENCORP.(TOKOKOSEN) isatradingcompanyspecializedintradewithChina.Inrecentyears,ithasbeenmakingactiveeffortstoconductthebusinessthatintegratesmanufacturingandtrading.Itsmajorbusinessismanufacturingandsellinggarments,andfabricusedforautomobilesatitsdomesticandoverseasproductionbases.KosenFibertec
(Thailand)Co.,Ltd., itssubsidiary inThailand,manufactures,sellsandwholesalesautomobilepartsandotherprod-ucts. JBIC provided aloantoTOKOKOSENtoincreaseinthecapitalofthissubsidiary.
47
JBIC Annual Report 2013
Daika Kogyo Co., Ltd.Manufacturing and Sales Business of Plastic Film
BELLSONICA CORPORATIONManufacturing and Sales Business of Automobile Parts and Other Products
TAISHODO CORPORATIONManufacturing and Sales Business of Electronic Circuit Boards
Ryonan Electric CorporationManufacturing and Sales Business of Automobile Parts
SHOSHIBA MANUFACTURING COMPANY LTD.Manufacturing and Sales Business of Automobile Parts and Other Products
HIROSE CorporationManufacturing and Sales Business of Power Distribution Boards
ThailandIndia
Viet N
am
IndiaM
exicoIndia
3. EPS(ElectricPowerSteering)brushholderassembliesareelectricpowersteeringcomponentparts.
3
Examples of Business O
utcomes in FY
2012 2. Exam
ples o
f Business Outco
mes Relating to
Supp
ort
for SM
Es
DaikaKogyoCo.,Ltd.hasachievedstableproductqual-ityinitsmanufactureofabroadrangeofplasticfilmfromfoodpackagingtoindustrialmaterialthroughitsintegratedproductionstructure.Thecompany’sThaisubsidiaryDaikaKogyo(Thailand)Co.,Ltd.manufacturesbreathablefilmusedasabacksheetfordisposablediapers.JBICprovidedaloan
toDaikaKogyoCo.,Ltd.to expand the manu-facturing facilitiesandequipmentatthelocalsubsidiary.
TAISHODOCORPORATIONundertakesallprocessesofelectroniccircuitboardmanufacture,fromprintedcircuitboardpatterndesign,throughpartsprocurementtoboardmountingandtest-ing,andisanindustryleaderinitstechnologicalexpertiseandqualitycontrolcapabilitiesunderpinnedbyitsuniquehigh-mix,low-volume,short-runproductionsystem.TheVietnamesesub-
sidiaryTaishodoVietnamCo., Ltd. manufacturesandsellselectroniccir-cuitboards.JBICprovideda loan to TAISHODOCORPORATION’s HongKong subsidiary to fi-nance the Vietnamesesubsidiaryforitsfactoryexpansion.
BELLSONICACORPORATION(BELLSONICA)hasstrengthintheintegratedproductionprocess—rangingfromproductdesigntowelding,paintingandassembling,inadditiontoitshightechnologicalcapabilitiesinmanufacturingmetal-stampedparts,whichwillconstituteamajorframeworkofautomo-biles.BellsonicaAutoComponentIndiaPrivateLimited,itssubsidiaryinIndia,manufacturesandsellsautomobileparts.
JBICprovidedaloantoBELLSONICAforfinanc-ingtheexpansionofthesubsidiary’splant.
RyonanElectricCorporationmanufacturesandsellselectricalcomponentpartsformotorvehicles,primarilywireharnesses,basedonitsowndesignforeachvehiclemodel.Thecom-pany’sstrengthisintheoutstandingqualityofitsproducts.TheIndiansubsidiaryRYONANELECTRICINDIAPVT.LTD.manufacturesandsellselectricalcomponentpartsformotor
vehicles, includingEPSbrush holder assem-blies3.JBICco-financedwith The HyakujushiBank, Ltd. the fundsnecessaryfortheIndiansubsidiary’scapital in-vestment.
HIROSECorporationdesigns,manufacturesandsellshigh-voltagepowerdistributionboardsandawide rangeofcontrolpanels,anditsstrengthisinitsintegratedbusinessstructurethatalsoincludestheinstallationandmaintenanceofthoseproducts.Thecompany’sIndiansubsidiaryASAHISwitchgearProductsLimitedmanufacturesandsellspower
distributionboards.JBICco-financed with TheHyakujushi Bank, Ltd.thefundsnecessaryfortheIndiansubsidiarytoestablishanewplatingandpaintingplant.
SHOSHIBAMANUFACTURINGCOMPANYLTD.(SHOSHIBA)manufacturesandsellspress-moldedsafetypartssuchasairbagcasesandseat frames.SHOSHIBAMEXICANAS.A.deC.V., itssubsidiary inMexico,manufacturesandsellsautomobilepartsandotherproducts.JBICprovidedloanstoSHOSHIBAforinvestinginthissubsidiaryandforparent-
subsidiarylending.
48
JBIC Annual Report 2013
3
Examples of Business O
utcomes in FY
2012 3. Exam
ples o
f Business Outco
mes Relating to
the Enviro
nment
Supporting Environmental Conservation and Improvement Projects
Nowadays,achievingeconomicdevelopmentcompatiblewithenvironmentalsustainabilityisrecognizedasacommonchal-lengefacingdevelopedanddevelopingcountriesalike.Giventhisself-realization,therearegrowingexpectationsacrosstheworldonimplementingprojectsconducivetoenvironmentalconservationandimprovement. Awiderangeofeffortsareunderwayallovertheworldinthissector,includingenergyefficiencyimprovementprojects;renewableenergyharnessingprojectssuchassolarandwindpowergeneration;highlyefficient,highperformancecoal-firedthermal power generation and natural gas-fired combinedcyclepowerprojectsthatreducecarbondioxideemissions;urban transport projects such as transit rails that mitigatetrafficcongestionandreduceairpollution;smartgridprojects
thatsupplyefficientpowerbyusingITandeco-cityprojectsthataimtorealizeenvironmentallysustainablecities. Amidthesedevelopments,JBICisdevotingitselftosup-portingenvironmentconservationandimprovementprojects,nottomentionenvironmentalandsocialconsiderationsbeingmadeinindividualprojects.JBICalsolaunchedGREEN(GlobalactionforReconcilingEconomicgrowthandENvironmentalpreservation)operations inApril2010andhassincebeenactivelyfocusingitssupportoneffortstoconservetheglobalenvironment, suchasprojects thatareexpected tosignifi-cantlyreducegreenhousegas(GHG)emissions,whiletakingaccountoftheglobaldisseminationofJapan’sinternationally-acclaimedadvancedenvironmentaltechnologies( see p. 59).
Examples of Business Outcomes Relating to the Environment3·
Supporting Renewable Energy and Waste-to-Energy Projects in Malaysia
Providing Local Currency Loans to Support Japanese Companies’ Participation in Renewable Energy Power Generation
JBICestablishedacreditlineforRHBBankBerhad(RHB),oneoftheleadingcommercialbanksinMalaysia.ThecreditlineisextendedundertheGREENoperationstoprovidenecessaryfundingforbio-masspowergenerationandotherrenewableenergyprojectsandwaste-to-energyprojectsinMalaysia.Environment-relatedbusinessopportunitiesare increasing inMalaysiawith the introductionofsubsidiesforrenewableenergyprograms,suchasthefeed-intariffsystem.Thiscreditlineisexpectednotjusttocontributetoareduc-tion inGHGemissions, but also toprovide Japanese companieswithgreaterenvironment-relatedbusinessopportunitiesinMalaysia.
JBICisprovidingaprojectfinanceloanforrenewableenergyprojectsinCanadainwhichaJapanesecompanyinvests.Asdevelopedcoun-triesinparticularadoptpoliciesthatadvancetheuseofrenewableenergy,businessopportunitiesforJapanesecompaniesaswellwillcontinuetoexpand.Underthisproject,aconsortiumwillbuildandoperatewindpowerstationsandsolarpowerstationsinOntarioandBritishColumbia,Canada,andsellthegeneratedpoweroverthefollowing20years.Thisprojectisalong-terminvestmentwithrevenue received in the local currency, so JBIC isminimizing theriskinherentinforeigncurrencyborrowingsbyextendingfinanceinCanadiandollars.Inthisway,JBICisprovidingsupportforlong-termoverseasprojectsbyJapanesecompanies.
49
JBIC Annual Report 2013
Supporting Renewable Energy Projects in Colombia
Participation in the East Asia Low Carbon Growth Partnership Dialogue
Partnerships and Knowledge Sharing in the Environmental Sector
Asenvironment-relatedprojectsareexpectedtobeimple-mented in many places across the world with the aim ofrealizing global environmental conservation and a lowcarboneconomy,JBICissupportingJapaneseoverseasbusi-nessdeploymentaswellaseffortsbeingmadeby foreigngovernments,notonly infinancingbutthroughinformation
sharingandknowledgedisseminationbyholdingseminarsandparticipatinginrelevantevents,whileformingclosepartner-ships with foreign governments and government agencies,domesticprefecturalandmunicipalgovernments,andotherstakeholders.
3
Examples of Business O
utcomes in FY
2012 3. Exam
ples o
f Business Outco
mes Relating to
the Enviro
nment
JBIChasestablishedacreditlineforBancodeBogotáS.A.(BancodeBogotá)inColombiaundertheGREENoperationstoprovideneces-saryfundingforenvironmentalprojectsutilizingrenewableenergyinColombia,includingsmall-scalerun-of-the-riverhydroelectricgenera-tionandbiomasspowergeneration.TheColombiangovernmentispursuingenvironmentalpoliciesthat includenumericaltargetstocutitsGHGemissions,andthiscreditlineisexpectedtogivefurthermomentumtotheintroductionofrenewableenergyandcontributetothereductionofGHGemissionsinColombia.ItisalsoexpectedtofacilitatethespreadofJapan’sinternationallyrecognizedadvancedenvironmentaltechnologiesinColombia.
JBIC, togetherwith theWorldBankand theAsianDevelopmentBank,participatedintheEastAsiaLowCarbonGrowthPartnershipDialogueheldinTokyoinApril2012. TheDialoguediscussedacooperativestructureforpromotinglowcarbongrowthinEastAsiawiththeaimofreconcilingglobalen-vironmentalpreservationwitheconomicgrowththroughthespreadofenergy-savingtechnologiesinEastAsiancountries.Participantsincludedgovernmentministersresponsibleforenvironmentalandenergy-relatedpolicyfrom18membercountriesoftheEastAsiaSummit (EAS). TheDialogue reachedanagreement that govern-mentofficials,researchinstitutions,andtheprivatesectorwillworktogethertobuildanetworkthatcanrealizelowcarbongrowthandsocietiesthataremuchmoreresilienttoclimatechange.
50
JBIC Annual Report 2013
3
Examples of Business O
utcomes in FY
2012 4. Exam
ples of Business Outcomes Relating to Studies, and Collaboration with
Overseas Government Organizations and International Organizations
JBICisundertakingstudiesandresearchrelatingtooverseasinvestmentsandinternationalfinance.Inregularcontactwithoverseas government organizations, foreign and domesticresearchinstitutions,andexperts invarioussectors, JBICisengaged ingatheringandanalyzinga rangeof informationandsharingknowledge.
Survey Report on Overseas Business Operations by Japanese Manufacturing Companies
JBIChasbeenconductingtheSurveyonOverseasBusinessOperationsbyJapaneseManufacturingCompanies,aques-tionnairesurvey,everyyearsince1989,andthefiscal2012surveywasthe24th.Thisannualsurveyattractswidespread
interest because ofits distinctive charac-ter and continuity inidentifyingthecurrenttrendsandfutureout-look of the overseasbusiness operationsof Japanesemanufac-turingcompanies.
JBICcompilestheresultsofthesurveyintoareport,andmakesthisreportandtheinformationitcontainswidelyavail-ableinbookletform,ontheJBICwebsite,andalsothroughseminarsheldincollaborationwithchambersofcommerceand regional banks throughout Japan. JBIC explained theresultsof thesurveyat the “Overseas InvestmentSeminar:Overseas Business Operations by Japanese ManufacturingCompanies”heldinTokyoinDecember2012,andalsoJBICheldexplanatorymeetingswithoverseasJapanesechambersofcommerceandindustryandforeigngovernmentsforcom-municatingtheseresultstotheirmembers.Thefindingsofthesurveywerealsousedeffectivelyinmakingpolicyproposalstoforeigngovernments. Survey results and seminarsarewidely reportedonbynewspapersandothermedia,andarticlesandcommentariescoveringthesurveyareprovidedtothevariousbranchesofthemassmedia.
Collaboration with Overseas Government Organizations and International Organizations
InMay2012,theEconomicForumofTheExport-ImportBankofChina,TheExport-ImportBankofKoreaandJBICwasheldinKorea.Theforumbroughttogethereconomistsfromtheeconomic research and sovereign risk assessment depart-mentstodiscussvariousissuesfacingtheglobaleconomyandpoliticalandeconomicconditionsinemerginganddevelop-ingcountries.Theforumwasthesixthheldsincethefirstin2009,andwashostedbyTheExport-ImportBankofKorea.ParticipantsdiscussedpoliticalandeconomicissuesfacingsixcountriesinEastAsia,theMiddleEast,SoutheastAsia,andLatinAmerica,andalsotheEuropeanfinancialcrisis.
TheInternationalMonetaryFund(IMF)andtheWorldBankAnnualMeetingswereheldinTokyoinOctober2012,thefirsttimesince1964.DuringtheperiodoftheMeetings,JBICheldthe“JBICInfrastructureDevelopmentSeminar”withthecoop-erationoftheMinistryofFinanceJapan,theWorldBank,andtheJapaneseBankersAssociation.FeaturingkeynotespeakersanddiscussionsamongpanelistsofinfrastructureexpertsfromJapanandoverseas,theseminaraimedatbuildingcommonground among the players concerned about the optimumformofcollaborationbetweenthegovernmentandprivatesectorsandthedivisionofresponsibilitiestomeetgrowinginfrastructuredemandespecially inemergingmarketcoun-tries.Theseminarhadanattendanceofapproximately200representativesfromJapaneseandforeignprivatecompanies,financialinstitutionsandgovernmentagencies,andembassiesinTokyo,andgeneratedconsiderableinterestandawarenessaboutinfrastructuredevelopmentthroughPPP(PublicPrivatePartnership).
AlsoinOctober2012,JBICtogetherwiththeBancoNacio-naldeDesenvolvimentoEconômicoeSocial(BNDES)heldthe“BNDES-JBICSeminarCommemorating50YearsofCoopera-tion”inTokyo.LikeJBIC,BNDESisagovernmentalfinancialinstitution,andoverthese50yearsofcooperation,thetwobankshavedevelopedastrongrelationshipinwhichJBIChasprovidedBNDESwithfundsamountingtoatotalof3.5billionU.S.dollarsfor14projects.Roughly300representativesfromJapanesecompaniesandJapaneseinvestorswereinvitedto
Examples of Business Outcomes Relating to Studies, and Collaboration with Overseas Government Organizations and International Organizations
4·
JBICInfrastructureDevelopmentSeminar
TheSixthEconomicForumofTheExport-ImportBankofChina,TheExport-ImportBankofKoreaandJBIC
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JBIC Annual Report 2013
theseminar,andaswellasreflectingonthehalf-centuryofcooperationbetweenthetwobanksandBrazil’seconomicdevelopment,theseminardiscussedthecourseoffutureco-operationaimedatpromotingeconomicexchangesbetweenthetwocountries.
InNovember2012,JBICparticipatedintheIslamicBankingSummitAfricaheldinDjibouti.ThesummitfeaturedaspecialaddressbythePresidentofDjiboutiandakey-noteaddressbytheGovernoroftheCentralBankofDjibouti,aswellaspresentationsbyseniorofficialsofinternationalorganizations.Thesummitdiscussedabroadrangeoftopics,includingriskmanagement,legalandaccountingissuesinIslamicfinancing,Islamiccapitalmarkets,and the Islamic insurance (takaful)market.
Collaboration with Universities, Research Institutions and Academic Societies
InresponsetoaninvitationfromtheFacultyofEconomicsofUniversitasIndonesia,inMay2012JBICsentamemberofstafftogiveaspeciallectureondevelopmentfinanceinAsiaandinfrastructurefinancingthroughPPP. AlsoinMay2012,JBICpresentedareportentitled“RisksinpolicyprescriptionsfortheEuropeansovereign-debtcrisis:Muddlingthroughortrappedinaviciouscircle?”atthe“TheCausesoftheEurozoneDebtCrisis” internationalfinancingpanelheldasapartoftheJapanSocietyofMonetaryEconom-ics2012SpringAnnualMeetingProgram. In June2012, JBICcosponsoredaseminarentitled “WeJapaneseshouldbeabletodobusinessbetterinIndia.Whynot?” with the Graduate School of Management of KyotoUniversity.Speakersfromabroadrangeoffields,includingJBIC,whichareconductingbusinessinIndia,gavepresenta-tionsandheldapaneldiscussiononpoints for successfulbusinessoperationsinIndia.AsecondseminarwasheldinMarch2013.InSeptember2012,JBICalsocosponsoredtheseminar“ProjectFinanceinOverseasProjectManagement”withtheGraduateSchoolofManagementofKyotoUniversity,and the Japan Institute forOverseas Investment (JOI). Theseminarwasattendedbyabout200people,and featured
presentationsandpaneldiscussionson the importanceofimprovingoverseasprojectmanagementcapabilities,andtheeffectiveuseof and recent trends inproject financeusingexamplesofactualinfrastructureprojects.
JBICheldthefollowingjointforumsandseminarswiththeNationalGraduateInstituteforPolicyStudies(GRIPS). InJuly2012,JBICandGRIPSheldtheseminar“Philippines’PolicyChallengesAhead:Public-PrivatePartnershipsandGov-ernance.”TheseminarinvitedaUniversityofthePhilippinesprofessorwhoalsoformerlyservedastheDirectorGeneralofNationalEconomicandDevelopmentAuthoritytospeak,anddealtwithPPPsinthePhilippines,wherethereisgreatbusinesspotentialandappealtoJapanesecompanies,andstillconsiderablescopeforinfrastructuredevelopment. InNovember2012,JBICandGRIPSheldtheseminar“Myan-mar’sPoliticalLandscapeandEconomicProspects.”FollowingapresentationbyanotedMyanmaresepoliticalandeconomicresearcherinvitedfromtheInstituteofSoutheastAsianStudies(ISEAS)inSingapore,JapaneseresearchersjoineddiscussionsfocusingonMyanmar’seconomicoutlook. InJanuary2013,JBICandGRIPSheldtheforum“Prospectsfor Indonesia’s Sustainable Growth—Is This Time DifferentfromthePre-AsianCrisisLandscape?”Followingapresenta-tionontheprospectsforIndonesia’ssustainablegrowthbytheformerGovernorofBankIndonesia,centralbank,arangeofviewswereexchangedonthesignificantpoliticalandeco-
Seminar“ProjectFinanceinOverseasProjectManagement”
BNDES-JBICSeminarCommemorating50YearsofCooperation
JBIC-GRIPSjointforum“ProspectsforIndonesia’sSustainableGrowth—IsThisTimeDifferentfromthePre-AsianCrisisLandscape?”
3
Examples of Business O
utcomes in FY
2012 4. Exam
ples of Business Outcomes Relating to Studies, and Collaboration with
Overseas Government Organizations and International Organizations
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JBIC Annual Report 2013
nomictransformationthathastakenplaceinIndonesiasincetheAsianfinancialcrisis. InSeptember2012,JBICco-hostedthe“SecondIMF-SCIDConferenceonEmergingAsia:Asia’sRebalancingandGlobalImplications”with the IMFand the StanfordCenter for In-ternationalDevelopment(SCID)ofStanfordUniversity.Thetwo-dayconferencegavethenumerousattendingexpertsandeconomists from Japaneseuniversities, StanfordUniversity,andAsiancountriesincludingChina,Malaysia,thePhilippines,SingaporeandThailand,theopportunityfordiscussiononabroadrangeofcriticaltopicsforthefutureoftheAsianandglobaleconomy. In November 2012, JBIC gave a presentation entitled“ProspectsofIndonesiaandThailand:PoliticalandEconomicConflictinMiddle-IncomeCountries”atthepubliclectureonAsiaco-hostedbytheInternationalCentrefortheStudyofEastAsianDevelopment(ICSEAD)andtheCityofKitakyushu.ICSEADisaresearchinstitutionestablishedwiththeaimofconductingresearchoneconomicsandsocialissuesinEastAsiaandcontributingtointernationalandregionalsociety. InDecember2012,JBICparticipatedinthe“InternationalConference:TheChangingParadigmofIndia-JapanRelations”hostedbytheIndianpolicythink-tankIndianCouncilforRe-searchonInternationalEconomicRelations(ICRIER).HeldinNewDelhi,thetwo-dayconferencewasbrokendownintofivesessionscoveringabroadrangeofthemes.Guestspeakersincludedexpertsfromtheindustrial,academicandgovern-mentsectorsfromJapanandIndia.
Collaboration with Private-sector Financial Institutions
JBICisholdingdiscussionsandexchanginginformationwithprivate-sectorfinancialinstitutionsconcerningthepoliticalandeconomicsituationincountriesimportanttoJapan,theirfutureprospects,andalsoriskanalysisandassessmentrelatingtothosecountries. In fiscal 2012 JBIC held workshops on the followingthemeswithofficialsresponsibleforsovereignriskscreeninginprivate-sectorfinancialinstitutions. InJuly2012,JBICheldtheforum“Philippines’PolicyChal-lengesAhead:Public-PrivatePartnershipsandGovernance.”AprofessorfromtheUniversityofthePhilippineswasinvitedtogiveapresentation,afterwhichdiscussionswereheldonthe economic prospects of the Philippines and the policychallengesthecountryfaces. InNovember2012,JBICheldtheforum“Myanmar’sPoliticalLandscape and Economic Prospects,” and hosted a seniorresearchfellowfromISEAS.Theworkshopservedtodeepenparticipants’ understanding of the political and economicsituationinMyanmarasJapanandothercountriesandinter-nationalorganizationssteadilymovetowardrecommencingsupportandassistance. At the forum “Prospects for Indonesia’s Sustainable
Growth—IsThisTimeDifferentfromthePre-AsianCrisisLand-scape?”heldinJanuary2013,JBIChostedtheformerGovernorofBank Indonesia,centralbank,who iscurrentlyaprofes-soroftheNanyangTechnologicalUniversity’sS.RajaratnamSchoolofInternationalStudies.DiscussionswereheldonthecurrentstateoftheIndonesianeconomyandprospectsforsustainablegrowthcomparedtothesituationbeforetheAsianfinancialcrisis. InFebruary2013,JBICheldthe“ResilienceIndex”work-shop,andhadtheopportunitytodiscusstheresilienceindex,developedbyanoverseas teamofexperts.This indexas-sessesthedegreeofresiliencethatdeveloped,developingoremergingcountrieshaveagainstanexternalshock,andidentifiesthebackgroundfactorstothis.
Sovereignriskworkshop
3
Examples of Business O
utcomes in FY
2012 4. Exam
ples of Business Outcomes Relating to Studies, and Collaboration with
Overseas Government Organizations and International Organizations
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JBIC Annual Report 2013
4Financial Instruments
1 Financial Instruments 56
2 Prominent Initiatives in Recent Years 65
3 Framework for Supporting Globalization Efforts of SMEs 66
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JBIC Annual Report 2013
Financial Instruments1·
Export Loans
Financial institution, etc., in foreign country
Importer(s) in foreign country(ies)Japanese exporter(s)
Loan(B/L)*2
Loan(B/C)*1
Exportsofplants,etc.
Loans
ExportloansareprovidedtooverseasimportersandfinancialinstitutionstosupportfinanceexportsofJapanesemachinery,equipmentandtechnologymainlytodevelopingcountries.Inparticular,productssuchasmarinevessels,powergenera-tionfacilitiesandothertypesofplantequipmentincorporatea large amount of advanced technology, and their exportcontributestoenhancingthetechnologicalbaseofJapaneseindustries.Further,Japaneseshipbuildingandplantfacilitiesindustrieshaveabroadrangeofsupportingindustriesinclud-ingSMEsproducingpartsandcomponents.ExportloansJBICprovides are also expected topositively contribute to thebusinessoftheseJapanesecompanies.Exportloansarealsoavailabletodevelopedcountriesineligiblesectors(seenote). Terms and conditions of export loans are determined
based on the OECD Arrangement. In principle, the loanamountshouldnotexceedthevalueofanexportcontractortechnicalservicecontract,andexcludesdownpayment.Whilelocalcostscannot,inprinciple,beappliedtotheloan,suchcostsmaybecoveredprovidedthattheamountiswithinthescopeprescribedbytheOECDArrangement.
(Note)EligibleSectorsofExportLoansinDevelopedCountries(AsofJuly31,2013)[IntegratedInfrastructureSystemProjects]
Railways(high-speed,inter-cityprojectsandprojectsinmajorcities),waterbusi-ness,biomassfuelproduction,renewableenergypowergeneration,nuclearpowergeneration,powertransformation,transmissionanddistribution,highlyefficientcoal-firedpowergeneration,coalgasification,carboncaptureandstorage(CCS),highlyefficientgas-firedpowergenerationandsmartgrid
[OtherExportTransactions]Ships,satellites,aircrafts,medicalpositronbeamtherapyequipment
*1.Loantoforeignimporters(Buyer’sCreditor“B/C”).*2.Loantoforeignfinancialinstitutions(Bank-to-BankLoanor“B/L”).
4
Financial Instruments
1. Financial Instruments
Supporting Japanese Companies’ Export to Overseas Water Infrastructure Project Supporting Export of Bulk Carriers by Japanese Companies
private-sector financial
institutions
JBICprovidesabuyer’scredittoHydrochem(S)PteLtd.(Hydro-chem),awhollyownedsubsidiaryofHyfluxLtd.(Hyflux)inSingaporewhich is one of the world’s leading fully-integrated water solu-tionscompanies.Thisloanis intendedtofinanceHydrochemtopurchasekeycomponents(reverse-osmosismembraneelementsmanufacturedbyTorayIndustries,Inc.andhighpressurepumpsmanufacturedbyTorishimaPumpMfg.Co., Ltd.) forSingapore’slargestmembrane-basedseawaterdesalinationplantfromMitsui&Co.PlantSystems,Ltd.Water-relatedbusinesshasbeengrowingatthegloballevel,aswatershortagescausedbypopulationgrowthandexpandingeconomicactivitieshavebeendrawingincreasinginteresttowaterissues.Thisloanwillthuscontributetomaintain-ingandimprovingtheinternationalcompetitivenessof Japanesecompaniesinwater-relatedbusiness.
JBIC signed buyer’s credit agreements with PB Vessels HoldingLimited(PBVH)intheBritishVirginIslandsforfundingitspurchaseoffourbulkvessels.PBVHisawhollyownedsubsidiaryofHongKong’s leading shippingoperator, PacificBasin Shipping Limited(PacificBasin).TheseloansareintendedtofinancePacificBasintopurchasefouroftheirbulkcarriersbuiltbythreeJapaneseshipbuild-ersrespectivelyintheirdomesticshipyards.Thisloanwillsupportto enhance the international competitiveness of the Japaneseshipbuildingindustry,whichfacesstiffcompetitionfromshipyardsinothercountries,andprovidessupporttoasectorthatplaysasignificant role in local economiesby furthering employment atmanySMEs,aswellasotherrelatedcompanies.
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JBIC Annual Report 2013
private-sector financial
institutions
Import Loans
Foreign exporter(s)Japanese Importer(s)
Loan
Importsofnaturalresources
Loan
Importloanssupportimportsofstrategicallyimportantgoodsincludingnaturalresources.TheyareextendedtoJapaneseimportersorforeignexporters.AsJapanispoorlyendowedwithnatural resources,stable importsofnatural resourcesoverthelongtermareoneofthekeyfactorsunderpinningdomesticeconomicactivity.Importloansfinancethedevelop-mentandimportofenergyresources,includingoilandLNG,andmineralresources,includingironore,copperandotherrarematerials. Inadditiontonaturalresources,JBICprovidesaguaranteefacilityforgoodsandservicesessentialtothesounddevelop-mentof the Japaneseeconomy, suchas for the import ofaircraft.
Products Eligible for Import Loans (Natural Resources)Oil,petroleumgas,LNG,coal,uranium,metallicore,metals,mineral phosphate, fluorite, salt, lumber, wood chip, pulp,andothermaterials
4
Financial Instruments
1. Financial Instruments
Supporting Secure Long-Term Access to Mineral Resources by Japanese Companies
Financing for Japanese Power Companies to Support Stable Supplies of LNG
Stablesupplyoftheenergyresourcesthatsustainourdailylivesandeconomicactivityisavitalissue,andLNGhasrecentlybecomeincreasinglyimportantasaprimarysourceofenergy.Inresponsetothesecircumstances,JBICprovidesJapanesepowercompanieswiththefundingnecessaryforimportofLNG.Thisfinancing,bysupport-ingLNGprocurementbyJapanesepowercompanies,contributestoastablesupplyofenergyresourcesforJapan,andthestabilityofpowersuppliesthatareessentialtodailylife.
JBICprovidesanimportloantoCorporaciónNacionaldelCobredeChile(CODELCO)inChiletoensureastableprocurementofmolybdenumoxide.Molybdenumisabyproductusedasanaddi-tivetoenhancetheheatresistanceandstrengthofsteel(specialsteel)andincreasethefunctionofchlorineresistance,etc.Thus,itisanindispensableraremetalformanufacturinghigh-qualityspecialsteelsuchasstainlesssteel.Recently,growingdemandinemergingmarketcountrieshasaffectedtheglobaldemand-supplybalanceofthismaterial.Thus,nineJapanesecompanieshavebeenmakingeffortswith the supportof theMinistryof Economy,TradeandIndustryandotherstosecurestableprocurementofmolybdenumoxidefromCODELCO.ThisloanwillbeextendedtoCODELCO,whichproducesmolybdenumproducts,onthepremiseoflong-termpurchaseofmolybdenumoxidebyJapanesecompanies.TheloanwillbeusedasfundsnecessarytoestablishanewrefineryplantofCODELCO.TheloanhashighsignificanceinsecuringmediumandlongtermaccesstomineralresourcesforJapan.
molybdenumoxide
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JBIC Annual Report 2013
private-sector financial
institutions
Government, financial institution, etc., in foreign country, Japanese bank
Japanese affiliate(s)
Joint venture partner(s)
Japanese company
Project(s) in foreign country(ies)
Loan
Loansand/orequityparticipations
Loan
Loans
Loans
Equityparticipations
Loan
Loans
Overseas Investment Loans
Overseasinvestmentloanssupport Japaneseforeigndirectinvestments. They are extended to Japanese companies(investors),overseasaffiliatesincludingjointventureswhereJapanesecompanieshaveequityinterestsandgovernmentsorfinancialinstitutionsthatmakeequityparticipationsinorextendloanstosuchoverseasaffiliates. DirectloanstoJapanesecompaniesareintendedforSMEs,aswellasforprojectsaimedatdevelopingorsecuringinter-ests in overseas resources that are strategically importantto Japan, or for projects to assist with merger and acqui-sition (M&A) activities and other agreements (including tolargecompanies).Moreover,JBICisabletoprovidetwo-steploans(TSLs)tosupporttheoverseasbusinessdeploymentof
JapanesecompaniesincludingSMEs,aswellasTSLsintendedtosupporttheirM&Aactivities.JBICisalsoabletoprovideshort-term loans for overseas business operations whenbridge loansarerequiredtofill thefinancinggapbefore itofferslong-termloans.JBICisfurtherempoweredtoextendinvestmentloansforprojectsindevelopedcountriesforeli-giblesectors(seenote).
(Note)EligibleSectorsofOverseasInvestmentLoansinDevelopedCountries(AsofJuly31,2013)Railways(high-speed,inter-cityprojectsandprojectsinmajorcities),waterbusiness,renewableenergypower generation, nuclearpower generation, power transfor-mation,transmissionanddistribution,highlyefficientcoal-firedpowergeneration,coal gasification, carboncaptureand storage (CCS), smart grid, developmentoftelecommunicationsnetwork,biomassfuelproduction,highlyefficientgas-firedpowergeneration,aircraftmaintenanceandsales,M&Aactivities,etc.
4
Financial Instruments
1. Financial Instruments
Supporting Financing for Large-Scale LNG Project Led by Japanese Companies
Supporting Japanese Company’s Business Activities by Providing Loan in Local Currency
JBICprovidesloanstofinanceAustralia’slarge-scaleIchthysLNGProjectwhereJapanesecompanieshavebeentakingtheleadindevelopingthegasandcondensatefieldsandproducingLNGandotherpetroleumproducts.TheglobaldemandofLNGisprojectedtoincreaseduetogrowingdemandinemergingmarketcountriesandheightenedenvironmentalawareness.InJapan,therehavebeenincreasinghopesforastablesupplyofLNGinrecentyears.ThisprospecthasmadeAustralia,withitsabundantgasreservesandpoliticalandeconomicstability,increasinglyimportantasasupplysourceofLNG.Inthiscontext,supportingJapanesecompaniesforleadingthedevelopmentofenergyresourcesinthisprojecthasasignificantimplicationforsecuringastableLNGsupplytoJapan.
JBICprovidesaloandenominatedinIndonesiarupiahtoPT.JTEKTINDONESIA(JID),anIndonesiansubsidiaryofJapaneseJTEKTCOR-PORATION.ThisloanisintendedtofinanceJIDtoaddadditionalequipmentfacilitiesforexpandingtheirmanufacturingandsalesofautomobileandmotorcyclepartssuchaselectricpowersteering,bearingsandstarterclutches.Indonesiaisapromisingmarketwithsustainedgrowth,whichisindicatedbyitsannualproductionofover1.0millionautomobilesin2012.ThisloanwillcontributetomaintainingandimprovingtheinternationalcompetitivenessoftheJapaneseautomobilepartsindustry.
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JBIC Annual Report 2013
Untied Loans
Untiedloansarefinancingbasicallytodevelopingcountriesnecessary to implementprojectsand importgoods,or forsuchcountriestoleveltheirinternationalbalanceoftrade,orstabilizetheircurrency.Loansarenotconditionalonprocure-mentofequipmentandmaterialsfromJapan. Capital procured from untied loans is used to: Securestable supplies of energy and mineral resources to Japan;PromotebusinessactivitiesofJapanesecompanies;MaintainandexpandtradeanddirectinvestmentfromJapan;Financeprojects having significant effect on global environmentalpreservation;andFinanceprojectsmaintaininginternationalfinancialorder.
4
Financial Instruments
1. Financial Instruments
Project(s) in the recipient country(ies)
Exporter(s)
Government, financial institution, etc.,
in foreign country
Foreign importer(s)
Importsofequipmentand
technology
Loan
private-sector financial
institutions
GREEN OperationsPromoting the overseas business having the purpose of preserving the global environment, such as preventing global warming
Eligible Entity:
Eligible Projects:
Foreigngovernment,governmentalagenciesorlocalgovernments,publicenterprisessuchasutilitiesoperatingcloselywithgovernment,
foreignfinancialinstitution,multilateralinstitution.
1. Favorableimpactonpreservationoftheglobalenvironment,suchassignificantlyreducingGHGemissions.
2. AcceptingJBIC-MRV*processontheeffectoftheenvironmentalpreservation. (e.g.Energyefficiencyimprovement,Renewableenergy,etc.)*JBICoriginalmethodologyforMeasurement,ReportingandVerification.
JBIClaunchedGREEN(GlobalactionforReconcilingEconomicgrowthandENvironmentalpreservation)operationsinApril2010. Previously, JBIC’s financing operations had centeredmainlyonprojectsdirectlyaimingtomaintainandimproveinternationalcompetitivenessofJapaneseindustries,suchasprojectsinvolvingJapanesecompanies’investmentandma-chinery/equipmentexports.Accordingly,projectsdedicatedsolelytopreservationoftheglobalenvironmentweresofarnoteligibleforJBICsupport.LaunchingGREENoperationsen-abledJBICtofocusitsfinancingonprojectsseekingtopreservetheglobalenvironment,suchasthosethatmateriallyreducegreenhousegas(GHG)emissions,whilepropagatingadvancedJapaneseenvironmentaltechnologiesacrosstheworld.
Private Flows
Guarantees
Equityparticipations/Loans
Supporting GHG Emission Reduction Projects in Brazil Supporting Japanese Business Activities Affected by Flood Damage
JBICprovidesaloanforKASIKORNBANKPublicCompanyLimited(KBANK),acommercialbankinThailand,tosupporttherecoveryandbusinesseffortsofanumberofJapaneselocalaffiliatesthatsuffereddirectlyorindirectlyfromtheunprecedentedfloodthatoccurredmainlyinAyutthayaandPathumthaniProvinces,andthecapitalcity,Bangkok in2011. Itprovides long-termsub-loanstosubsidiariesof JapaneseSMEsaswellasthose localcompaniesthatconstitutesupplychainsofJapaneseaffiliatesthroughKBANK.
Thisloanistherebyaimingata speedy recovery of Japa-nese business activities. Tenregional financial institutionsacross Japan having partner-shipwithKBANKparticipatedinthisloanascofinancers.
JBICprovidesalong-termloantoPetróleoBrasileiroS.A.(PETRO-BRAS),astate-ownedoilcompanyofBrazilunderJBIC’sGREENop-erations.TheloanwillsupportreduceGHGemissionsbyfinancingtheco-generationprojectatComperjoilconcessionsandtheflaringgasreductionprojectatmultipleoffshoreoilfieldsintheCamposBasin1.This loanwill support reduceGHGemissionsaswell asfurtherstrengthentherelationshipbetweenJBICandPETROBRAS,whichhashighpresenceinBrazil,asitholdsthemajorityofthe
country’soilandgasreserves,andonwhichJapanesecom-panieshavefocusedattentionasabusinesspartner.
1. ThisprojectaimstoreduceGHGemissions by diverting flaringgas, which was being wastedpreviously,toincreasethesup-plyfordomesticconsumptioninBrazil,uponthestabilizationandcapacityexpansionsofcompres-sorsetc.
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JBIC Annual Report 2013
Japanese company(ies)
Japanese company(ies)
Japanese company(ies)
Japanese company(ies)
Equityparticipations
Equityparticipations
Equityparticipa-
tions
Equityparticipa-
tions
Equityparticipa-
tions
Majorrole
Businessalliance
Overseas project
Foreign company
Fund
Fund
Other investor(s)
Other investor(s)
Equityparticipation
Equityparticipation
Equityparticipation
Equityparticipation
consortium
Equity Participations
EquityparticipationsarecapitalcontributionstothecompanieswhichJapanesecompanieshaveequitystakessetupbyJapanesecompaniestoundertakeoverseasprojectsandfundswhereJapanesecompaniesperformasignificantrole.Inprinciple,equityparticipationstakethefollowingforms.
Japanese companies make equity participation in an overseas project
Japanese companies acquire equity interests in a foreign company to form business alliance
Japanese companies participate in fund (and perform such major role as general partner in their management and investment decisions)
Japanese companies form a consortium and participate in an international fund
4
Financial Instruments
1. Financial Instruments
2. TheDMICprojectisaJapan-IndiajointdevelopmentprojectwhichaimstobuildafreightraillinetoconnectDelhiandMumbaianddevelopinfrastruc-turealongthelinesuchasindustrialestates,logisticsparks,powerplants,roads,ports,residentialareasandcommercialfacilitiesmainlybymobilizingprivateinvestments.
Supporting Japanese Companies’ Participation in Infrastructure Projects
Supporting Japanese Companies’ Participation in Infrastructure Projects in Southeast Asian Countries
JBICcontributestoDelhiMumbaiIndustrialCorridorDevelopmentCorporationLimited(DMICDC)inIndiabyitsequityparticipation.DMICDChasbeenincorporatedforcarryingoutprojectdevelop-mentactivitiessuchaspreparingfeasibilitystudyanddevelopmentmasterplansandforcoordinatingtheimplementationofthevariousprojectsincludingsupporttoobtainnecessarylicensesfortheDelhiMumbaiIndustrialCorridor(DMICDC)project2,cooperatingwiththecentralgovernmentofIndiaandStategovernmentsinDMICregion.WiththisequityparticipationinDMICDC,JBICintendstoadvisestructuringinfrastructureprojectsintheDMICregionfromtheirearlystagesandtherebysupporttheparticipationofJapanesecompaniesintheseprojects.
JBICcontributescapitaltoTheCapAsiaASEANInfrastructureFundIIIL.P.(theFund)managedbyCapitalAdvisorsPartnersAsiaPte.Ltd.,(CapAsia),afundmanagementcompanyinSingapore.TheFundisaprivateequityfundtargetinginvestmentininfrastructureprojectsinSoutheastAsiancountries.AlsoinvestorsintheFundare:TheBankofTokyo-MitsubishiUFJLtd.(BTMU),TheRohatynGroup(TRG),thefundmanagementcompany in theU.S.,andCIMBGroup(CIMB),amajorfinancialgroupinMalaysia.TRGandCIMBaretheparentcompaniesofCapAsia.ThroughparticipatingintheFund,CapAsia,TRG and CIMB will identify new projects by making use of theirexistingnetworks.Additionally,BTMUaimstoprovideitscustomerswithbusinessrelationshipsbetweentheFundportfoliocompaniesaswellasprovidefinancialinstrumentstotheportfoliocompaniesandpromotecooperationwithJapanesecompanies.TheparticipationofBTMUandJBICintheFundisexpectedtoleadtostrengtheningsupportfortheoverseasbusinessexpansionofJapanesecompaniesanddeployingJapaneseoverseasinfrastructurebusinesspromotedunderthecooperationbetweenthepublicandprivatesectors.
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JBIC Annual Report 2013
Inadditiontoloansandequityparticipations,JBICalsoprovidessupportthroughitsguaranteefacility.Guaranteesareprovidedforloansextendedbyprivatefinancialinstitutions,bondsissuedbygovernmentsofdevelopingcountriesoroverseasJapanesecom-panies,andcurrencyswaptransactions.JBICalsoissuesreassuranceforguaranteesfromexportcreditagenciesinothercountries.
Private financial institution, etc.
Investor(s)
Investor(s)
Japanese company(ies)
Japanese importer(s)
Japanese affiliate (Issuer)
Government, etc., in foreign country
Overseas infrastructure projects,etc.
Foreign exporter(s)
Japanese company (Parent company, private financial institution, etc.)
Private financial institution, etc.
Swap counterparty in overseas
Private financial institution
Guarantee
Guarantee
Guarantee
Importofproducts
Guarantees
Loan
Currencyswap
contract
Loan
IssueofbondsCounterguarantee
Issuesofpublicbonds,etc.
Invest-mentOperationGuarantee
Subguarantee
LoanGuarantee
Localcurrency
loan
Guarantees
Guarantees for Imports of Manufactured Products
Guarantees for Corporate Bonds Issued by Japanese Affiliates
Guarantees for Co-financing, Overseas Syndicated Loans and Public Sector Bonds
Guarantees for Currency Swaps
JBIC has a guarantee facility forthe borrowings made by Japanesecompanies to finance the importof aircraft and other manufacturedproductsthatareimportantforJapan.
JBICsupportsJapaneseaffiliatesop-eratingoverseasbyprovidingguaran-teesforthebondstheyissueinlocalcapitalmarkets.
Loanstodevelopingcountriesinvolve,among others, currency conversionand transfer risks,andcountry risk.GuaranteesthatJBICissuestocoversuchriskswillenableJapaneseprivatefinancialinstitutionstoprovidemediumandlongtermfinancingfordevelop-ingcountries,supportingdevelopingcountriestobringinprivatecapitalandfacilitatingprivatecompaniesexpand-inginternationalbusinessactivities.
JBIC provides guarantees for swaptransactions to support the localcurrencyfinancingofoverseasinfra-structure projects, etc., undertakenbyJapanesecompanies.
4
Financial Instruments
1. Financial Instruments
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JBIC Annual Report 2013
Foreign company(ies)
Japanese company(ies)
Foreign importer(s)
Foreign ECA
Private bank(s)
Export
Counterguaran-
tee
Loan
Guarantee
Loans from the IMF, World Bank, etc.
Government, financial institution, etc.,
in foreign country
Import or other external transaction(s)
Loan(Condi-
tionality)
Counter Guarantees for Export Credits
InthecasewhereJapanesecompaniesexportma-chineryandequipmentjointlywithothercountry’scompanies, JBICprovidesacounterguaranteeforthe guarantee provided by that country’s ExportCreditAgency(ECA).ThisfunctionenablesJBICtoparticipateinmultilateralmutualguaranteeschemeswithotherECAs,whichreducestheadministrativeburdenofexportersandexpeditesthearrangementoffinancing.Throughsuchschemes,JBICsupportstheexportsbyJapanesecompaniesincooperationwithforeignexporters.
Bridge Loans
Acquisition of Loan Assets and Public and Corporate Bonds
Research and Studies
JBICprovidesshort-termfinancingforgovernmentsofdevelopingcountriestomeettheir foreigncur-rencyneedsforexternaltransactionswhentheyfacebalance-of-paymentdifficulties.
JBIC provided bridge loans (short-term bridgingloans)forMyanmarinJanuary2013tosupportclearthearrearsofpastloansfromtheAsianDevelop-mentBank(ADB)andtheInternationalDevelopmentAssociation(IDA),oneoftheWorldBankGroup.
When JBIC provides export loans, import loans, overseasinvestment loans and untied loans, JBIC can also providecredits, in addition to providing loans and guarantees, bypurchasing loanassetsandacquiringpublicandcorporatebonds1issuedbyborrowersforfunding.Theobjectiveofsuch
JBICconductsresearchandstudiesonindividualprojectsdur-ingtheirinitialstage,aswellasresearchandstudiesfocusedonspecificregionsorindustrysectorsthatmayhaveabearingonspecificprojectsoccasionally.Thisisaneffectivemeansofuncoveringpotentiallyfavorableprojects,andsupportstoincreaseexportsofmaterialsandservicesfromJapanforthatproject,aswellastoexpandopportunitiesforparticipationbyJapanesecompanies.Researchandstudiesareconductedateachstagenecessaryforrealizationoftheproject,includingcreationofamasterplanforanindividualproject,conductingofprefeasibilityandfeasibilitystudies(Pre-F/S,F/S),frontend
operationsistopromoteprivatefinancialinstitutions’loansininternationalfinanceandJapanesecompanies'fundingininternationalcapitalmarkets.
engineeringdesign(FEED),andstudiesofregionsandindustrysectors linked to specific projects. After the research andstudiesarecompleted,follow-upreviewsareconductedatleastonceeachyeartoconfirmtheprogressoftheproject.Researchandstudiesareconductedinthefollowingorder.1.Selectionofaresearchandstudysubject2.Selectionofthecontractortoconductresearchandstudies3.Conductoftheresearchandstudies4.Completionoftheresearchandstudyreport5.Follow-up
1. Thescopeofassetsandsecuritiesacquired includespublicbonds,corporatebonds,debtsecuritiesandtrustbeneficiaryrights.
4
Financial Instruments
1. Financial Instruments
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JBIC Annual Report 2013
Special purpose company(SPC)
Overseas Local companies
Originator
Private financial institutions, etc.
Overseas Japanese affiliates
Obligor
Overseas Japanese affiliates
Private financial institutions
Investors (in Japan and overseas)
Investors
Transferofloans
Accountsreceivable,etc.
Guarantee
GuaranteeGuarantee
Loans
Assignmentofaccountreceivable
Purchaseofasset-backedsecurity
Issueofasset-backedsecurity
SPC or Trust
Proceeds
Asset-backedsecurities
Proceeds
JBICprovidessupportforsecuritization,etc.inordertosupplementandencouragetheactivitiesofprivatefinancialinstitutions.
Securitization, etc.
1. Securitization (Guarantees)
3. Securitization of Receivables, etc.
2. Securitization (Acquisition of Securities)
Incaseswherespecialpurposecompanies (SPCs)or trustcompanies issue asset-backed securities or other financialproductswithloansorotherassetsascollateral,JBICguaran-teesthepaymentofsuchasset-backedsecuritiestoreducecountryandstructurerisks,therebysupportingtheissuanceofbondsintheemergingcapitalmarkets.
JBICprovidesguaranteesforthereceivablesandothermon-etaryclaimsheldbyoverseassubsidiariesofJapanesecom-panies,inordertofacilitatethepurchaseofsuchreceivables
JBICsupportsbondissuesbyacquiringaportionoftheasset-backed securities issuedby SPCsor trust companieswithloansorotherassetsascollateral.JBIC’sacquisitionwillcon-tributetothesmoothissuanceofbonds,aswellasstimulatesthemarketbycirculatingtheacquiredbondsbackintothemarketwhenmarketconditionsallowit.
bybanks.JBICisalsoabletoprovideguaranteesforsecuritiesissuedbySPCsortrustcompaniestosecuremonetaryclaimstheyhaveacquiredfromoverseasJapanesesubsidiaries.
TheabovediagramsdepicttheschemeswhereSPCsareused,buttheclientscanalsouseschemeswheretrustsareusedorJBICacquiresorprovidesguaranteesforassetsbackedbysecuritization.
4
Financial Instruments
1. Financial Instruments
Supporting Securitization of Credit Card Receivables in Thailand
JBICacquiresapartofasset-backedsecuri-ties(ABS)inasecuritizationtransactionofthecreditcardreceivablesoriginatedbyAEONThanaSinsap(Thailand)PublicCompanyLimited(ATS),asubsidiaryofAEONFinancialServiceCo.,Ltd.JBICalsoprovidesguaranteefortheremainingpor-tionofthisABSandanasset-backedloanfundedbyprivateinvestors.Thistransac-tionisthefirstsecuritizationdealwiththeinvestorsoutsideThailandforATSandthe
firstcreditcardreceivablessecuritizationdealforJBIC.WithJBIC’spartialacquisitionandguaranteeprovisiontothesecuritizedproduct,thistransactionisexpectedtocontributetomeetingtheneedsofATSfordiversificationof fundingaswellastoprovidinginvestmentopportunitiestoprivateinvestorsinthemarketbymitigatingcountryriskandstructuringrisk.
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JBIC Annual Report 2013
4
Financial Instruments
1. Financial Instruments
ProjectProponent
JBIC
Disclosure
Category A
Category B
Category FI
Category C
In cases where the project proponent discloses the monitoring report, the report is in principle also disclosed on the JBIC website.
The project outline, category, and EIA report (required for Category A) are in principle disclosed on the JBIC website
Screening form is submitted at time of funding request.
Information necessary for the Environmental Review is submitted.
Status report is presented on implemen-tation of measures for environment and social considerations (monitoring).
The Environmental Review and Screening Form are disclosed on the JBIC website (with the exception of Category C projects).
Catego-rization
Funding Commit-ment
Confirmation of Monitoring (Site inspections con-ducted as necessary)
Environmental Review (Site in-spections are in principle conduct-ed for all Category A projects)
Environmental Review*
For Category A projects, an environment impact assessment (EIA) report must be submitted.
Japan Bank for International Cooperation Guidelines for Confirmation of Environmental and Social Considerations
Growinginterestinenvironmentalconservationhasledtoaworldwidetrendformorerigorousenvironmentalregulations.Therearenotafewcases,especiallyinoverseasprojects,inwhichinsufficientriskmanagementofpossibleenvironmentalandsocialimpactshasseriouslyaffectedprojectimplementa-tionorunderminedsocialreputation. Inconductingtheseoperations,JBICconfirmswhethertheborrowermakesappropriateconsiderations for localcom-munitiesandthenaturalenvironmentinalltheJBIC-financedprojectsbasedonthe“JapanBankforInternationalCoopera-
tionGuidelinesforConfirmationofEnvironmentalandSocialConsiderations”(EnvironmentalGuidelines). TheEnvironmentalGuidelinessetouttheprocedures,cri-teriaandrequirementsthatJBIC-financedprojectsmustmeetinconfirmationofenvironmentalandsocialconsiderations.When JBIC judges the project proponents have not madeappropriateenvironmentalandsocialconsiderations,itwillencouragethemtotakeremedialmeasures. Ifappropriateenvironmentalandsocialconsiderationshavenotbeentaken,JBICmaydecidenottoextendfunding.
Procedure for Confirmation of Environmental and Social Considerations
Prospectiveprojectsarescreenedpriortofunding,andclassifiedintocategoriesaccordingtothedegreeofpotentialenvironmentalimpact.AnEnvironmentalReviewisthenconductedtoverifythattheenvironmentalandsocialimpactshavebeenconsideredinapropermanner.Afterfundinghasbeenapproved,projectsaremonitoredtoassesstheactualimpact.
Projectsareclassifiedintooneofthefollowingfourcategoriesinrelationtothedegreeofenvironmentalimpact,basedontheinformationprovidedbytheprojectproponentduringthescreeningprocess.
CategoryA: Projectwiththepotentialforaseriousandadverseimpactontheenvironment.
CategoryB: Projectwiththepotentialforanadverseimpactontheenvironment,butlessthanthatofCategoryAprojects.
CategoryC: Projectwiththepotentialforminimalornoadverseimpactontheenvironment.
CategoryFI: ProjectforwhichJBICprovidesfundingtoafinancialintermediary,andafteracceptanceofJBICfunding,thefinancialintermediaryselectsandconductsscreeningsforspecificsubprojects,incaseswheresubprojectscannotbedeterminedpriortoacceptanceofJBICfunding,andwheresuchsubprojectsareanticipatedtohaveanimpactontheenvironment.
*ForCategoryFIprojects,JBICconfirmsthroughthefinancialintermediarythattheproperenvironmentalandsocialconsiderationsindicatedintheEnvironmentGuidelineshavebeenfollowedfortheproject.
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JBIC Annual Report 2013
Prominent Initiatives in Recent Years2·
Efforts to Meet Local Currency Needs
TheJapaneseyen,U.S.dollarandEuroarethestandardcur-renciesoffinancingofJBIC,andinordertomeettheincreas-ingdemandsforfinancingdenominatedinothercurrencies(includingcurrenciesofdevelopingcountries),JBIChasbeenworkingonthefollowingfinancingmenu:1. Direct loans (in local currency):DirectloansincurrenciesotherthantheJapaneseyen,U.S.dollarandEurocanbeconsideredonacase-by-casebasisbyconfirmingtheavailabilityoffundinginsuchcurrencies.2. Two-step-loans (TSLs) through local financial institutions:JBICprovidesloanstolocalfinancialinstitutionsindevelopingcountries(includinglocalsubsidiaries/branchesofJapanesefinancialinstitutions)intheJapaneseyenorU.S.dollar,who,inturn,extendsub-loansinlocalcurrencies.
3. Guarantees for corporate bond issues denominated in local currencies:JBICprovidesguaranteesforbondsissuedinlocalcurrenciesbyJapanesesubsidiariesoperatingoverseas,undertheAsianBondMarketsInitiatives(ABMI)agreedatthe6thASEAN+3(Japan,ChinaandKorea)FinanceMinisters’MeetinginAugust2003.4. Guarantees for loans denominated in local currencies:JBICprovidesguaranteesforloansinlocalcurrenciesprovidedbyprivatefinancial institutionstosupportlocalcurrencyfi-nancing.5. Guarantees for currency swaps:InApril2012,JBICstartedtheguaranteeoperationsforcross-currencyswaptransactions inordertofacilitatefundingoflocalcurrencies.
*Thefacilityisnotafundoraccount,butaprogramwithspecificproce-duresformanagingoperations.
4
Financial Instruments
2. Prom
inent Initiatives in Recent Years
JBIC Facility for African Investment and Trade Enhancement (FAITH)
JBIC launched in June 2013 the JBIC Facility forAfrican In-vestmentandTradeEnhancement(“FAITH”)tosupportthepromotionofprivatesector-ledgrowthandtheaccelerationofinfrastructuredevelopmentinAfricancountriesbydrawingonitsfinancialinstrumentssuchasloans,equityparticipationsandguarantees.FAITHwasexpandedandevolvedfromtheJBICFacilityforAfricanInvestment(“FAI”)launchedinApril2009.Under FAITH, JBICwill actively extend loans, includ-ingthosein localcurrency,makeequityparticipationsandprovideguaranteesinAfricancountriesincooperationwithinternationalorganizations.InTICADV,theGovernmentof
JapanexpressedthatitwouldworktowardexpandingtradeandinvestmentinAfricancountriesintandemwiththeprivatesector. Under FAITH,it is expected thatsuchfinancial supportwould approximatelyamountto5billionU.S.dollarsoverthenext5years.
Promoting Sustainable and Resilient Growth
Loan/EquityParticipation/Guarantee
EquityParticipation
Loan
Loan
LoanLoan
African Countries
Private Sector-led Growth
— Promoting Trades— Supporting Manufacturing
Sector Investment— Natural Resource
Development
Accelerating Infrastructure Development
— Building Electricity Supply Capacity
— Development of Financial Sector
International Organizations
FAITH
Japanese Private-sector Financial
Institutions
Japanese Companies
Local Financial Institutions
Export
Investment
Businesscooperation
Co-financing
Guarantee
JBIC signed a loan agreementwiththeDevelopmentBankofSouthernAfricaLimited(DBSA).The loan is aimed to supportrenewable energy projects inSouthernAfricancountries
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JBIC Annual Report 2013
Japan Bank for International Cooperation (JBIC) and JapanExternalTradeOrganization(JETRO).”Underthispolicy,JBIChas been working with the Regional Banks Association ofJapanandotherentitiestostrengthencooperationwithlocalfinancialinstitutionsindevelopingcountrieswhileidentifyingwhatkindofsupportJapaneseSMEsneedthroughJapaneseregionalfinancialinstitutionstoexpandtheirbusinessopera-tionsoverseas.
Cooperation with Local Financial Institutions in Developing Countries
OnDecember21,2010,theFinancialServicesAgency,theMinistryofFinance,andtheMinistryofEconomy,TradeandIndustryannouncedajointpolicycalledthe“DevelopmentandStrengtheningofSupportSystembyFinancialInstitutionsfor Small andMediumEnterprises’ Entry intoAsia throughCoordinationamongJapaneseRegionalFinancialInstitutions,
Framework for Supporting Globalization Efforts of SMEs3·4
Financial Instruments
3. Framew
ork fo
r Supp
orting G
lob
alization Effo
rts of SM
Es
Organization of JBIC’s Finance Groups (from April 2012)
Country Local Financial Institutions in Developing Countries When MOU was signed Number of participating Japanese Regional Financial Institutions
Thailand KASIKORNBANKPublicCompanyLimited May2011 25(asofMay2,2013)
Indonesia PT.BankNegaraIndonesia July2011 31(asofMay7,2013)
India StateBankofIndia August2012 38(asofMarch13,2013)
ThePhilippinesBDOUnibank,Inc.(BDO) March2013 7(asofJuly23,2013)
MetropolitanBankandTrustCompany(Metrobank) March2013 33(asofJuly23,2013)
Energy, Natural Resources and Environment Finance Group
Infrastructure Finance Group Industry Finance Group
Oil and Gas Finance Department
Mining and Metals Finance Department
Nuclear and Renewable Energy Finance Department
Power and Water Finance Department
Transportation and Telecommunication Finance
Department
Corporate Finance Department
Marine and Aerospace Finance/Financial Products Department
Special Advisor for SMEs
Finance Division for SMEs of East Japan
West Japan Office
Finance Division for SMEs of West Japan
SpecializedunitshavebeenestablishedtosupportSMEs.Theyarealsodesignedtostrengthenthecooperationofregionalfinancial
institutionsinJapanandlocalfinancialinstitutionsindevelopingcountries.
Local Financial Institutions in Developing Countries and Participating Japanese Regional Financial Institutions
Strengthening the Framework for Supporting SMEsFollowingtheinaugurationofJBICinApril2012,JBICassignedoperatingofficersdedicatedtoprovidingsupportforJapaneseSMEswiththeiroverseasbusinessdevelopment,inordertoconductoperationsmoreresponsivelyandflexibly.Theseof-ficersareresponsibleforSMEsinEastJapanandWestJapan,separately.JBICalsosetupunitsthatspecializeinthesupportofoverseasbusinessdevelopmentofSMEsatitsHeadOfficeinTokyoandWestJapanOfficeinOsaka,respectively.Thesearrangements,togetherwiththe16overseasrepresentativeoffices in JBIC’sworldwide network, have further strength-enedtheframeworkforsupportingSMEs.ThisallowsJBIC,forexample,abetteropportunityforprovidinginformationonspecificloansandinvestmentclimatesabroad.
Astheglobalizationoftheworldeconomyadvances,ithasbecomeimperativeforJapanesemid-tierenterprisesaswellassmallandmediumenterprises(collectively“SMEs”)toactivelydevelopoverseasbusiness.JBICsupportssuchactivitiesbyprovidinginformationandholdingseminarsontheoverseasinvestmentclimate,aswellasdirectlysupportingthefinancingofoverseasoperationsthrough loansandequityparticipa-tion.JBICalsosupportstheseeffortsthroughitscollaborationwithregionalfinancialinstitutionsinJapanandlocalfinancialinstitutionsindevelopingcountries.
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JBIC Annual Report 2013
InNovember2012,JBICsignedanMOUonoperationalcooperation with The Hyakujushi Bank, Ltd. (114Bank) ofJapanforthreemajorpurposes:(i)supportingoverseasbusi-nessactivitiesof Japanesecompanies,particularlySMEs intheSetouchiareawherethe114Bankhasitsmainbusinessbase; (ii)exchanging informationon investmentclimates inforeigncountries; and (iii) expandingcofinancing for them.UnderthisMOU,JBIC,incooperationwith114Bank,signedaloanagreementinthesamemonthwithASAHISwitchgearProductsLimited,anIndiansubsidiaryofHIROSECorporation.BasedinMitoyoCity,KagawaPrefecture,HIROSECorporationisanSMEthatdesigns,manufactures,andsellshighvoltagedistributionswitchgearsandcontrolpanelsofvariouskinds. JBIC’seffortsinthisregardwerenotlimitedtoJapanonly.InJuly2012,JBICorganizedameetinginBangkok,Thailand,withlocalrepresentativesofJapaneseregionalfinancialinstitutionstoexchangeviewsonhowtosupportJapanesecompaniesoperating locally. This is just one example of JBIC’s ongo-ingeffortstofurtherstrengthentheframeworkforassistingJapaneseSMEstoexpandtheiroverseasbusinessoperationsincooperationwithJapaneseregionalfinancialinstitutions.
Information Services, Seminars, etc.JBICorganizesseminarsandconsultationsessionsonover-seasbusinessexpansionincooperationwithotherJapaneseentities, including regional banks and other local financialinstitutions,prefecturalandmunicipalgovernments,andlo-cal chambers of commerce and industry. It also conductsfieldstudiestoassessinvestmentclimatesincountrieswhereJapanesecompaniesareactivelydoingbusiness.Thefindingsof these studies are compiled into guidebooks, which areavailableinbookformandonJBIC’swebsite. DuringFY2012, JBICpublished four suchguidebooks inJapanese:“InvestmentClimateinThailand,”“InvestmentCli-mateinVietNam,”“InvestmentClimateSeriesinChina:AnOverview,”and“InvestmentClimateinIndonesia.” Moreover,JBICprovidesknowledgeandadviceoninvest-ingoverseasandhowtostartbusinessesoverseas. Italso
In FY2011 and FY2012, JBIC signed a memorandum ofunderstanding(MOU)withseverallocalfinancialinstitutionsinThailand,Indonesia,India,andthePhilippinestoprovideaframeworkforsupportingJapaneseSMEsinexpandingtheiroperationsoverseasthroughregionalfinancialinstitutionsinJapan.UndertheseMOUs,JBIChasencouragedtheselocalfinancialinstitutionsinthefourcountriestonewlysetupasinglecontactpointforJapanesecompanies(“JapanDesk”)orexpandsuchJapanDeskifonealreadyexists.IthasalsobuiltaframeworkforcontinuousconsultationwitheachofthemonspecificmeanstocooperateinsupportofJapaneseSMEsindoingbusinessthere.ManyregionalfinancialinstitutionsinJapanhavealreadyjoinedsuchframeworks.
Cooperation with Japanese Regional Financial Institutions
JBIC has signed MOUs on the operational cooperation ofregional financial institutions in Japan chiefly to exchangeinformation on overseas business operations of Japanesecompanies,particularly JapaneselocalSMEs,aswellasontheinvestmentclimateofoverseascountries.
4
Financial Instruments
3. Framew
ork fo
r Supp
orting G
lob
alization Effo
rts of SM
Es
Aseminaronoverseasinvestment
MOUsignedwiththeStateBankofIndia
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JBIC Annual Report 2013
offers an itinerant advisory service in many parts of Japanincooperationwithprefecturalandmunicipalgovernmentsandlocalchambersofcommerceandindustrythatsupportlocalcompaniesinexpandingtheiroperationsoverseas.Thisservice,whichisavailableonaregularbasisinSendai,Ota,Tokyo,andNagoya,offersadviceontheoverseasinvestmentclimateandhowtoobtainlong-termfinancing,amongothertopics.Aspartofitsadvisoryservices,JBICalsooffersadviceontaxes,accounting,andlegalmattersinrelationtoChina,India,andASEANcountries,throughexternalexperts,asearlyasthepreliminaryconsultationphase.
4
Financial Instruments
3. Framew
ork fo
r Supp
orting G
lob
alization Effo
rts of SM
Es
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JBIC Annual Report 2013
5Operational and Administrative Policies
1 Corporate Governance 70
2 Risk Management 74
3 Public Information and Disclosure 77
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JBIC Annual Report 2013
Board of Corporate AuditorsAccounting Auditor
Management Advisory and Evaluation Committee
Risk Advisory Committee
Internal Audit Committee
Internal Audit Department
Office of Corporate Auditor
Board of Directors
Shareholder Meeting
Executive Committee
Credit Committee
Corporate Risk Management Committee
Compliance and Customer Protection
Management Committee
Personnel Committee
Preliminary Credit Committee
ALM Committee
Global Head Committee
Supervisory and Evaluation Function
[Deliberative Committees]
[Decision Making Committees]
Executive Function
Outside Corporate Auditors Outside Director
Corporate Governance1·
Fundamental Approach to Corporate GovernanceJBICismakingeffortstobuildcorporategovernancestructureinconductingoperationswithparticularattentiontointegrity
How National Government is Involved in JBICAsJBIChasitsshareswhollyownedbytheGovernmentofJapan, it is subject to the control of the Japanese govern-ment, itssoleshareholder.Additionally, it issubjecttothenationalbudgetpassedintheDiet,inspectionsbytheBoardof Audit of Japan, by the Competent Minister and by theFinancialServicesAgencywhoseinspectionisdelegatedbytheCompetentMinister.
Supervisory and Evaluation Function and the Conduct of JBIC Operations
Tostrengthenthesupervisoryandevaluativefunctionofthe
andefficiency,asitseekstofulfillthemissionsetoutunderthe JBIC Act (Law No. 39, 2012) and realize its corporatephilosophy.
BoardofDirectorsaswellasconductspeedyandflexibleoperations,JBIChasestablished,inadditiontotheBoardofDirectors,theBoardofCorporateAuditorsandotherorgansrequiredbytheCompaniesAct,theManagementAdvisoryand Evaluation Committee, the Risk Advisory Committee,theInternalAuditCommitteeandtheExecutiveCommittee.Furthermore, a variety of committees were set up by theExecutiveCommitteethatdelegatedspecifictaskstothem.(1) Board of DirectorsTheBoardofDirectorsconsistsof5members,ofwhichonememberisanoutsidedirectorassetforthintheCompaniesAct. The external director supervises the conduct of JBIC
5
Operational and A
dministrative Policies
1. Co
rpo
rate Go
vernance
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JBIC Annual Report 2013
operations fromthepointofviewofacorporateoutsider,apart from representativedirectorsof JBIC. In addition, hecontributestoimprovingthegovernanceofJBICasamemberoftheManagementAdvisoryandEvaluationCommitteeaswellastheRiskAdvisoryCommittee.
(2) Board of Corporate AuditorsTheBoardofCorporateAuditorsconsistsof3auditors,ofwhich two are outside corporate auditors, as set forth intheCompaniesAct.OutsidecorporateauditorscontributetoimprovingthegovernancestructureofJBIC,astheycooperatewiththefull-timeauditorinauditingtheconductofitsopera-tions.Asasectionhelpingthemexecutetheirresponsibilities,thereistheOfficeofCorporateAuditor.
(3) Management Advisory and Evaluation CommitteeTheManagementAdvisoryandEvaluationCommitteeconsistsof 3 to 7 external experts and the outside director. TheymakeassessmentandofferadviceonthemattersreferredtothembytheBoardofDirectorspertainingtothebusinessoperationsandmanagementofJBIC.
List of Members of the Management Advisory and Evaluation Committee
List of Members of the Risk Advisory Committee
Name Occupation
〇 ShujiroUrata Professor,GraduateSchoolofAsia-PacificStudies,WasedaUniversity
AkiraKondoh JBICManagingDirector(OutsideDirector)
YoshikatsuSuzuki SeniorCommentatorofJijiPressLtd.
◎ YuzoTakagi Chairman&RepresentativeofAuditCorporationGODAI,CertifiedPublicAccountant
MikikoFujiwara CEOofAlphaAssociatesCo.,Ltd.
HirokazuYoshikawa SeniorCorporateAdviserofDOWAHoldingsCo.,Ltd.
◎Chairman 〇Deputy–chairman(Listedintheorderof50characterkanasyllabary,namelistedwithouthonorifics)
Name Occupation
ShuheiAbe President,CEO&CIOofSPARXGroupCo.,Ltd.
AkiraKondoh JBICManagingDirector(OutsideDirector)
ToshikiTomita Professor,FacultyofLaw,ChuoUniversity
ChiekoMatsuda ProfessorofManagement,GraduateSchoolofSocialSciences,TokyoMetropolitanUniversity
(4) Risk Advisory CommitteeTheRiskAdvisoryCommitteeconsistsof3to7externalex-pertsandtheoutsidedirector.Theyofferadviceonthemat-tersreferredtothembytheBoardofDirectorspertainingtoriskmanagementandassessmentframeworkassociatedwithlarge-lotdebtorsandriskexposuretolarge-scaleprojects.
Name Occupation
〇 KeisukeYokoo AdvisorofMizuhoSecuritiesCo.,Ltd.
◎ NaoyukiYoshino Professor,FacultyofEconomics,KeioUniversity
◎Chairman 〇Deputy–chairman(Listedintheorderof50characterkanasyllabary,namelistedwithouthonorifics)
(5) Internal Audit CommitteeTheInternalAuditCommitteeconsistsofrepresentativedi-rectorsandtheoutsidedirector.Theymakedecisionsanddeliberations concerning important matters pertaining tointernalaudit,asdelegatedbytheBoardofDirectors.
(6) Executive CommitteeTheExecutiveCommitteeconsistsofrepresentativedirectors,executivedirectorandall themanagingexecutiveofficers.Theymakedecisionsanddeliberationsconcerningimportantmanagerialmatters,therebytakingresponsibilityforconduct-ing flexible JBIC operations, as delegated by the Board ofDirectors.Certaindecisionssuchasfinancing toa specificprojectaredelegatedtothefollowingcommittees.(i) Credit CommitteeThe Credit Committee makes decisions and deliberationsconcerningimportantmattersonloan,guaranteeandequityparticipation by JBIC, as delegated by the Executive Com-mittee.(ii) Corporate Risk Management CommitteeTheCorporateRiskManagementCommitteemakesdecisionsanddeliberationsconcerningimportantmatterspertainingtothecorporateriskmanagementofJBIC,asdelegatedbytheExecutiveCommittee.(iii) Compliance and Customer Protection Management
CommitteeThe Compliance and Customer Protection ManagementCommittee makes decisions and deliberations concerningimportantmatterspertainingtothecomplianceandcustomerprotectionmanagementofJBIC,asdelegatedbytheExecutiveCommittee.(iv) Personnel CommitteeThePersonnelCommitteemakesdecisionsanddeliberationsconcerningimportantmatterspertainingtothepersonnelofJBIC,asdelegatedbytheExecutiveCommittee.(v) Preliminary Credit CommitteeThePreliminaryCreditCommitteemakesdeliberationscon-cerningimportantmatterspertainingtoassessmentpoliciestowardloan,guaranteeandequityparticipationandcreditpolicytowardlarge-lotdebtors,asdelegatedbytheExecutiveCommittee.(vi) ALM CommitteeThe ALM Committee makes deliberations concerning im-portantmatterspertainingtotheasset-liabilitymanagement(ALM)ofJBIC,asdelegatedbytheExecutiveCommitteeandtheCorporateRiskManagementCommittee.
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Operational and A
dministrative Policies
1. Co
rpo
rate Go
vernance
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JBIC Annual Report 2013
Internal Audit Department
Corporate Group
Managing Director
(GlobalHeadofCorporateGroup)
Outside Managing Director
(ResponsibleforManagementAd-visoryandEvalu-ationCommittee,andRiskAdvisory
Committee)
Energy, Natural Resources and Environment
Finance Group
Managing Executive
Officer
(GlobalHeadofEnergy,NaturalResourcesand
EnvironmentFinanceGroup)
Infrastructure Finance Group
Managing Executive
Officer
(GlobalHeadofInfrastructureFinance
Group)
Industry Finance Group
Managing Executive
Officer
(GlobalHeadofIndustryFinance
Group)
Credit, Assessment, and Systems
Group
Managing Executive
Officer
(GlobalHeadofCredit,Assess-
ment,andSystemsGroup)
COO, Senior Managing Director
(ResponsibleforBusinessoperation)
CEO, Executive Managing Director
(Governor’ssupport/ResponsibleforCredit,Assessment,andSystemsGroup)
Governor
(GovernorofJBIC/ResponsibleforInternalAuditDepartment)
MemberofExecutiveCommitteeMemberofInternalAuditCommitteeMemberofBoardofDirectors
(vii) Global Head CommitteeTheGlobalHeadCommitteemakesdeliberationsconcern-ing cross-cutting matters among internal groups, includingoperationalpolicyforeachcountryorregion,asdelegatedbytheExecutiveCommittee.
Adopting Mission/Sector-Specific Group StructureJBIC reconstituted its organization and adopted mission/sector-specificgroupstructure in July2011. Itsobjective istostrengthenthecapacitytoformulateprojectsbybringingtogetherknow-howandexpertiseineachsectorandarea,therebyfacilitatingJBICtoperformthefunctionsinitsmission
moreflexiblyandstrategically. Specifically,CorporateGroup;Energy,NaturalResourcesandEnvironmentFinanceGroup;InfrastructureFinanceGroup;IndustryFinanceGroup;andCredit,Assessment,andSystemsGroupweresetup,witheachGrouphavingdepartmentswithspecialexpertise. For each Group, the responsible board member is ap-pointed,andthemanagingdirectororamanagingexecutiveofficerperformsasGlobalHeadofeachGroup.EachGroupismanagedinanintegralmannerundertheGlobalHeadoftheGroupinanefforttoconductspeedy,flexibleandefficientoperations.
5
Operational and A
dministrative Policies
1. Co
rpo
rate Go
vernance
(AsofApril1,2013)
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JBIC Annual Report 2013
Fundamental Policy on Internal ControlAsaninternalcontrolsystemforoveralloperations,JBIChasappropriateinternalauditprocedurestoreview,aswellasevaluatetheirappropriatenessandeffectivenessandmakerecommendationstoimprovethem.Forthesepurposes,JBIChastheInternalAuditCommittee,whichincludestheoutsidedirector,asadecision-makingbodyindependentoftheExecu-tiveCommitteethatisresponsibleforconductingoperations.ThereisalsotheInternalAuditDepartmentindependentofthelinedepartmentsanddirectlyreportingtotheGovernor. The Internal Audit Department exchanges relevant in-formationandcooperateswithCorporateAuditorsandanAccountingAuditorforexecutingefficientinternalaudit.( See p. 139 for the Fundamental Policy on Internal Control)
Maintenance and Control of Information AssetsJBICsets forth its fundamental “SecurityPolicy”concerningtheuseandmanagementofinformationassets( see p. 141) in order to secure high standard information security andimplementproperandefficientoperations.Basedonthestan-dard,JBICproperlyhandles,manages,protectsandmaintainsinformationassets.
ComplianceJBIChassetforth in itsCodeofConductto“Maintainhighethicalstandardsandalaw-abidingspirit.Observeourmoralcodeasa JBICmemberatall times.” Itsmanagementandstaffmembersarekeenlyawareofthepublicmissionsandsocialresponsibilitiescalledforintheinternationalcommunityandincivilsociety.Itisalsowellrecognizedthatanyactinviolationoflaws,regulationsorrulesbyitsmanagementandstaffwillleadtodenigratingconfidenceinJBICasawholeandhaveamateriallyadverseeffectonitsoperations.Attentivetotheseneeds,JBICisconstantlystrivingtowardcomplianceandoperationalintegrity. JBICmakespositiveeffortstoimprovecompliance,primar-ilythroughtheComplianceandCustomerProtectionManage-mentCommittee,andhasestablishedtheLegalAffairsandComplianceOfficeasanintegratedcompliancemanagementunit. EachgroupandoverseasrepresentativeofficeservingasaregionalheadquarterhasanIntegratedComplianceOfficer,whileeachdepartmentandoverseasrepresentativeofficehasaComplianceOfficerformakingpositiveeffortsincompliance,suchasfosteringsuchawarenessamongJBICemployees. To foster in-depth understanding of compliance, JBICmakesgooduseofitsComplianceManualandprovidestrain-ingsessionsforitsmanagementandstaffmembers.Italsodevelopsacomplianceprogrameveryfiscalyearasabasisformakingnecessarycompliancearrangementsandprovidingrelevanttraining. Inadditiontothereportingproceduresinitsordinarylineofbusiness,JBIChasputinplaceandisproperlyoperating
aninternalreportingsystemsuchthatitiscapableoffindingsignificant compliance issues at an early stage and takingappropriateremedialaction.
Protection of Private InformationJBIC has drawn up and disclosed its Privacy Policy ( see
p. 142)whichstipulatesappropriatemanagementofprivateinformationheldbyJBICpursuanttotheprovisionsoftheActontheProtectionofPersonalInformationHeldbyIndependentAdministrativeAgencies,etc.
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Risk Management2·
Ingeneral,theoperationsoffinancialinstitutionsinvolvevari-ousrisks,includingcreditrisk,marketrisk(suchasinterestrateandexchangeraterisk,etc.),liquidityriskandoperationalrisk.Asapolicy-basedfinancialinstitution,JBICconductsfinancialoperationstoachievepolicyobjectives.Thus,JBICdiffersfromprivatefinancialinstitutionsinitsnatureaswellastheextentofrisksinvolvedinitsoperationsandwaystodealwiththem.Nonetheless,recognizingtheimportanceofappropriateriskmanagementasafinancialinstitution,JBIChasputinplaceaninstitutionalsystemforriskmanagementcommensuratewithdifferenttypesofrisksandforaddressingintegratedriskmanagement. Morespecifically,JBICdefinestheobjectiveofriskmanage-mentasidentifying,measuringandmonitoringvariousrisksJBICisexposedtointheprocessofconductingoperationstoensurethesoundnessandintegrityofoperationsandincrease
Creditriskreferstothepotentiallossfromadeclineorlossofthevalueofcreditassetsduetodeteriorationinthefinancialconditionsofadebtor.ThisriskisinherentinJBIC’soperationsasitprimarilyengagesinlendingactivities.CreditriskexposuretoJBICmaybeclassifiedinto:sovereignrisk,whichinvolvesfinancingforeigngovernments;corporaterisk,whichinvolvesfinancingbusinessfirms;projectrisk,whichoccurswhenaprojectfinancedinprojectfinancing—afinancingstructureinwhichaloanisprimarilysecuredonthecashflowgeneratedfrom theproject—fails togenerate theplannedcashflow;and country risk, which involves financing foreign firms aswellasprojects located in foreigncountries (a riskaddedtocorporate riskandproject riskarising from thecountrywherethedebtorresidesandtheprojectislocated).GiventheverynatureoffinancialsupportJBICprovidesforpromot-ingoverseasdevelopment and securementof strategicallyimportant resources to Japan, for maintaining and improv-ingtheinternationalcompetitivenessofJapaneseindustries,andforpromotingtheoverseasbusinessforpreservingtheglobalenvironment,suchaspreventingglobalwarming,JBICfrequentlyextendsloanstoforeigngovernments,governmentagenciesandcompanies.Therefore,sovereignandcountryrisksaccountforaconsiderableshareofthecreditrisksac-companyingJBIC’soperations.
Managing Credit RiskThe cornerstone of credit risk management at JBIC is theevaluationofanindividualborrower’screditworthinessintheprocessleadingtocreditapproval.Whenanewloanapplica-tionisbeingprocessed,therelevantfinancedepartmentandtheCreditDepartment collect andanalyze informationontheborrower.Theoverseasrepresentativeofficesalsoplay
transparency.Forthispurpose,JBIChasdesignatedthestaffresponsibleformanagingvariousrisksandhasadepartmentworkingontheoverallriskmanagement. Inaddition,therearetheCorporateRiskManagementCommitteeandtheALMCommitteethatmakediscussionsandconsiderationsfortheeffective functioningof riskmanagement. JBIChasalsosetuptheRiskAdvisoryCommittee,whichconsistsofexternalexperts,toprovidetheJBICBoardofDirectorswithadviceontheriskmanagementandassessmentsystemwithrespecttolarge-lotdebtorsandonissuesreferredtobytheJBICboardofdirectorswithrespecttorisksassociatedwithlarge-scaleprojects. ThefollowingsectionsdescribehowJBICmanagesrepre-sentativerisksJBICisfacing,amongvariousotheroperationalrisks, in conducting operations as a policy-based financialinstitution.
apartincollectinginformationonforeigngovernmentsandcompanies.Itisbasedonthisinformationanditsanalysisthatcreditappraisaltakesplace,withchecksandbalancesatworkbetweenthesedifferentdepartmentsthroughoutthisprocess,leadingtothefinaldecisionbymanagement. Inprovidingcredit for foreigngovernmentsandcompa-nies,JBICmakesthemostofitsuniquepositionasanofficialfinancier,asitexchangesviewsandinformationwiththegov-ernmentsandrelevantauthoritiesintherecipientcountries,multilateral institutions suchas the InternationalMonetaryFund(IMF)andtheWorldBank,otherofficialexportcreditagenciesand,furthermore,withprivatefinancialinstitutionsindevelopedcountries.Usingallthesechannels,JBICevalu-atessovereignandcountryrisksbasedonabroadrangeofinformationcollectedonborrowinggovernments,governmentagenciesandpoliticalandeconomicconditionsintheircoun-tries. Inprovidingcredit fordomesticandforeigncompanies,there isaneed toevaluate theircreditworthinessand theappropriatenessofthecollateraltheyoffer.Inparticular,forcreditprovisionrelatedtooverseasprojects,creditevaluationinvolvescheckingandexaminingthecertaintyofconductingtransactionstobefinanced,feasibilitystudiesoftheprojectsandtheindustryinwhichtheborroweroperates.
Internal Credit RatingJBIChasestablishedan internalcredit ratingsystemwhichcovers,inprinciple,alltheborrowers.Internalcreditratingsarethecornerstoneofcreditriskmanagement,beingusedfor conducting individual credit appraisals and quantifyingcreditrisks.
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(AsofMarch31,2013;100millionsofyen)
Contract Amounts / Notional Amounts Credit Risk Amounts
Interest Rate Swaps 24,560 895
Currency Swaps 41,497 6,047
Forward Exchange Contracts 1 0
Other Derivatives ─ ─Credit Risk Reductions through Netting (2,845)
Total 66,058 4,097
Marketriskreferstothepotentiallossfromchangesinthevalueofassetsandliabilitiesasaresultoffluctuationsininter-estratesandforeignexchangerates.JBICmanagesspecificmarketrisksasfollows.
Exchange Rate RiskForeigncurrency-denominatedloansinvolvetheriskassoci-atedwithexchangeratefluctuations. JBIChasaconsistentpolicyofhedgingthefullamountofsuchexposurethroughcurrencyswapsandforwardexchangetransactions.
Interest Rate RiskInterestraterisk for foreigncurrency-denominatedloans ishedgedthroughinterestrateswapswithwhichbothforeigncurrency-denominatedloansandtheirfundingaremanagedinfloatingrates.Althoughyen-denominatedloansaremostlymadeinfixedinterestrates,theirinterestrateriskislimitedsincethematuritiesofloansandtheircorrespondingfundingaremoreorlessmatched.Inaddition,JBICcarefullycalculatesandanalyzesprojectionsofitsfutureasset/liabilitystructureandprofitsandlosses.
Derivatives Transactions(1) Basic Policy for Derivatives TransactionsJBICengages inderivatives transactionsexclusively for thepurposeofhedgingexchangerateandinterestraterisks.
(2) TransactionsDerivativestransactionsofJBICincludeinterestrateandcur-rencyswapsandforwardexchangecontracts.Thefollowing
tablegivesasummaryofthesetransactions.
Market Risk
Internal Assessment of Asset PortfolioJapaneseprivatefinancialinstitutionsundertaketheinternalassessmentofassetportfoliosinaccordancewithInspectionManualforDeposit-TakingInstitutions(the“FinancialInspec-tion Manual”) of Japan’s Financial Services Agency. JBIC issimilarlyundertakingtheinternalassessmentofitsloanport-folio,basedontheFinancialInspectionManualsothatthecharacteristicsofitsloanassetswillbeaccuratelyreflectedonitsassessment.Inthisprocess,thefirst-stageassessmentis conductedby the relevant financingdepartments,whilethesecond-stageassessmentisconductedbytheCreditDe-partmentandtheCountryCreditDepartment,whichistheninspectedbytheAuditDepartment.Theresultsof internalassessment conducted on the portfolio are not only usedinternallyforthecontinuousreviewsoftheloanportfoliobut
arealsoreflectedinthedisclosureofassetqualitytoenhancethetransparencyofJBIC’sfinancialposition.
Quantifying Credit RiskInadditiontoindividualcreditriskmanagement,JBICiswork-ingonquantifyingcreditriskswithaviewtoevaluatingtheriskoftheoverallloanportfolio.Toquantifycreditrisks,itisimportanttotake intoaccountthecharacteristicsof JBIC’sloanportfolio,whichholdsasignificantproportionoflong-termloansandloansinvolvingsovereignandcountryrisks.Alsotobetakenintoaccountaremechanismsforsecuringassets,suchastheParisClub1auniqueframeworkfordebtmanagement by official creditor countries. The credit riskquantificationmodelincorporatingthesefactorsismeasuringcreditrisksandisutilizedforinternalcontrol.
1. Aninformalgroupofofficialcreditorswhoseroleistofindcoordinatedandsustainablesolutionstothepaymentdifficultiesexperiencedbydebtornations.Sincethefirstmeetingtookplacein1956toresolvethedebtproblemofArgentina,themeetinghasbeenheldinParis,withtheFrenchTreasuryactingasitssecretariat.Hence,ithascometobecalledtheParisClub.
Credit Risk of Derivatives, etc.
(Note)“Thecreditriskamounts”arecalculatedunderUniformInternationalStandardsinaccordancewiththeBankingActofJapanandtherelatedregulations.
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(3) Risks Involved in Derivatives TransactionsDerivativestransactionsinvolvethefollowingrisks. Counterparty Credit RiskThepotentiallossfromthefailureofacounterpartytoperformitsobligationsinaccordancewiththetermsandconditionsofthecontractgoverningtransactionsduetobankruptcyoritsdeterioratingbusinessperformance. Market RiskThepotentiallossfromchangesinthemarketvalueoffinan-cialproductsduetofluctuationsininterestratesorexchangeratesinthemarket.
(4) Measures to Address These Risks Counterparty Credit RiskJBICconstantlymonitorsthemarketvalueofaderivativein
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Market RiskJBICutilizesderivativestransactionsexclusivelyforthepur-poseof hedging.Therefore, themarket riskonderivativestransactions and the risk on hedged (lending or funding)transactions,inprinciple,offseteachother.
Liquidityriskreferstothepotentiallossresultingfromdifficul-tiesinfundingduetoamaturitymismatchbetweenfinancingandfundingcausedbyunexpectedcash-outsorfrombeingforcedtofundataninterestratesignificantlyhigherthaninnormalcircumstances,aswellasthepotentiallossresultingfrom a failure to make transactions in the market due tomarket turmoilor frombeing forced tomake transactionsatasignificantlydisadvantageouspricecomparedtonormal
Operational risk refers to thepotential loss resulting frominadequateorfailedinternalprocesses,peopleandsystemsorfromexternalevents.Apartfromadministrativeandcomputersystemrisks,JBICrecognizesthatitsoperationsinvolvevariousdirectandindirectrisks.JBICwillproactivelyidentify,assessandmanagesuchrisks.
Administrative RiskAdministrativeriskistheriskofafinancialinstitutionincurringlosses fromtheneglectbyofficersandemployeestocon-ductadministrativeworkproperly,accidentscausedbythem,andviolationoflawsandregulationscausedbythem,etc.,conductedinthecourseoftheadministrativeworkprocess.JBIChasbeenminimizingthisriskbyensuringsoundopera-tionsthroughscrupulouschecksonworkprocesses,creatingoperationalmanuals,improvingtrainingprograms,andstream-liningandadoptingsystematicprocedures. Inaddition,theAuditDepartment,independentfromotherdepartmentsandreportingdirectlytotheGovernor&CEO,conductsinternalauditingofJBIC.
circumstances. JBICisminimizingliquidityriskthrougheffectivecashflowmanagementand thediversificationof its fundingsources,includingborrowingsundertheFiscalInvestmentandLoanProgram(FILP),government-guaranteedbondissuesininter-nationalcapitalmarketsandFILPagencybondissuesinthedomesticcapitalmarket.
Computer System RiskComputersystemriskreferstothepotentiallossfromabreak-downormalfunction incomputersystemsaswellas fromtheirmisuse.JBIChasbeenminimizingcomputersystemriskbyincreasingreadinesstorespondeffectivelytoemergencysituations.Specifically,(a)measureshavebeentakentopre-ventsystemmalfunctionsandleakageofclientinformation;and(b)contingencyplanshavebeenpreparedtorespondtosystemmalfunctionscausedbyaccidentsandothercauses,anddisaster-responsedrillshavebeenconducted.
Liquidity Risk
Operational Risks
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makingtransactionwitheachcounterparty,creditriskexpo-suretoitanditscreditworthiness.Suchinformationisthenused to assess the appropriateness of making transactionwithit.
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Public Information and Disclosure3·
JBIC isprovidinganddisseminating information toabroadrangeof thedomestic andoverseaspublic in an effort topromotefurtherunderstandingofitsoperationsandactivities. TheJBICInformationCenterattheHeadOfficeandtheWestJapanOfficemakeavailabletothegeneralpublicvariousbrochures, annual reports, public relations magazines andothermaterials.Inaddition,avarietyofinformationaboutJBICisprovidedtothedomesticandoverseaspublicthroughtheJBICwebsite(http://www.jbic.go.jp/en/).
PublicationsJBIC publishes its annual operations and activities, and fi-nancialconditionsinvariousdisclosurematerials, includingannual reports, business reports, financial statements, andtheForm10-KsubmittedtotheU.S.SecuritiesandExchangeCommission. Otherpublicationsavailabletothepublicinclude:apublicinformationmagazine,“JBICTODAY ,”whichreportsJBIC’slat-estactivitiesandtopicsonitsoperationsandotherrelevantissues;“JBICProfile:RoleandFunction,”abrochuredescribingJBICoperations;and“JBICProjectFinanceInitiatives.”
WebsiteThewebsiteprovidesaccesstoJBICinformation,includingitsfinancialinstruments,pressreleases,invitationstoseminars,overseasinvestmentclimatereports,reportsonvariousstud-ies,activitiesonenvironmentalissues,annualreports,variousbrochures,IRinformationforinvestors,JBICvideos,andothervarioustypesofinformation.
JBICwebsite
JBICProfile:RoleandFunction JBICProjectFinanceInitiatives
JBICToday
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(Principal) Materials for Providing Information
Source of Information Access
BusinessReport
AvailableattheHeadOfficeandtheWestJapanOffice
DistributedtotheNationalDietLibraryandeconomicorganizations,etc.
FinancialStatements
ListofAssets
ReportonSettlementofAccounts
Auditor’sOpinion
AuditReport
AnnualReport(JapaneseandEnglish)PublicRelationsMagazine,etc.
AvailableattheHeadOfficeandtheWestJapanOffice
Distributedtointerestedpersons/institutions
Website: TypeofBusiness
Operations,BusinessResults,OverviewofOrganization,FinancialComposition,etc.
Ontheinternet Address: http://www.jbic.go.jp/en/
Information Dissemination for the MediaAsidefrominformationdisseminationthroughvariouspublica-tions,thewebsiteandothermeans, JBICinformsthenewsmediaaboutitsoperationsandactivitiesthroughpressconfer-encesandmeetings,etc.
DisclosureJBICdisclosestothepublicoperationalandfinancialinforma-tiontopromotefurtherunderstandingofitscurrentactivitiesasfollows.
Information Dissemination from OverseasJBIC’soverseasrepresentativeofficesareactivelycontributingreportsandarticlestothenewsmediatoprovideinformationfromoverseas.TheyhavealsoappearedinTVnewsprogramsto provide timely topics that can only be reported at thelocal grassroots level, such as individual consumption andinformationontaxation,etc.
Promoting International ExchangeSince1976, JBIChasannuallyheld ‘JBICSeminars’ in Japantopromotemutualunderstandingwithitsoverseasbusinesspartnersandrelevantorganizationsbyinvitingofficialsfromforeigngovernments,governmentagencies,privatecompa-niesandfinancialinstitutions,etc.Thecumulativenumberofseminarparticipantshasexceeded600sofar.
GovernorOkudaatthepressconference
ParticipantsattheJBICSeminar
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Participating in Various EventsJBICparticipates invariouseventsboth in Japanandover-seas to introduce its functions, role, and supportactivitiesinenvironmentalandothersectors.InDecember2012,JBICparticipatedinEco-Products2012,heldatTokyoBigSight,bysettingupitsownboothandmakingpresentations.OutsideJapan,JBICtookpartintheseminarondigitalterrestrialtelevi-sionbroadcasting(DTTB),whichwasheldinQuito,EcuadorinJuly2012,topromotethetransfertoDTTBinthecountry.InFebruary2013,JBICattendedthe“InvestinginAfricanMiningIndaba2013,”conference,oneoftheworld’slargestminingconferences,heldinCapeTown,SouthAfrica.Moreinforma-tionontheseandothereventsinwhichJBIChasparticipatedisavailableontheJBICwebsite.
Eco-Products2012
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