the environment surrounding jbic · surging in emerging market countries. in addition, oligopoly...
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JBIC Annual Report 2012
2The Environment Surrounding JBIC
Challenges and Efforts of Three Finance Groups
1 Energy, Natural Resources and Environment Finance Group 24
2 Infrastructure Finance Group 27
3 Industry Finance Group 30
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JBIC Annual Report 2012
◉ 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
Oil Sand, CanadaSakhalin I, Russia
Sakhalin II, Russia
Pagardewa Oil Field, Indonesia
En�eld / Vincent Oil Field
Oil & Gas Field, Oman
Advance Payment Loan to ADNOC
Khafji & HoutField
Ohanet Field, Algeri
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, Canada
Curtis LNG
Bayu Undan LNG
PNG LNGTangguh LNG, Indonesia
Kangean Oil & Gas Field, Indonesia
Gas Fields, Malaysia
Tiga LNG, Malaysia
Gorgon LNG
Batu Hijau Mine, IndonesiaPluto LNG
Wheatstone LNG
Cape Lambert Iron Ore Shipping Port West Angeles Mine
Shark Bay Salt Field
Worsley Bauxite Mine &Alumina Re�nery
Rasp Zinc &
Lead Mine
Minerva MineKestrel Mine
Rolleston Mine
Moolarben Mine
Oaky Creek / NCA Mine
Forestation, NewZealand
Tayan Alumina Project, Indonesia
Taganito Nickel Project, Philippine
Advance Payment Loan to VINACOMIN
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, PeruAntamina Mine, PeruCerro Verde Mine, Peru
San 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 Re�nery / Aluminum Smelter, Brazil
CENIBRA Pulp, Brazil
NAMISA Mine, Brazil
MUSA Mine, Brazil
Logistical Support for Iron Ore Transportation, Brazil
Eagle Ford Shale Oil, US
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
1. Energy, Natural Resources and Environm
ent Finance Group
2
Energy, Natural Resources and Environment Finance Group1·
Increasingly Intense Scramble for Acquiring ResourcesForJapan,scarcelyendowedwithresources,itisimperativeto secure stable supplies of overseas energy and mineralresources,ifitistomaintainandmakeprogressoneconomicactivity. JBIC hasbeen supporting Japanese companies fordeveloping, acquiring interests in and importing overseasnaturalresourcesinfinancialterms,therebycontributingtosecuringtheirstablesuppliestoJapan. Especiallyinrecentyears,economicgrowthinChinaandotheremergingmarketcountrieshavemadeit increasinglytoughtoengageinglobalcompetitionforacquiringenergyandmineral resources.This isposingachallengeto Japanonhowtoobtainstableandaffordableenergyandmineralresources.
Rising Risk on the Demand and Supply SidesGrowingdemand forenergy inemergingmarket countrieshasexertedsignificantimpactsontheglobaldemand-supplybalanceofenergy.Inparticular,energyconsumptionintheAsia and Oceania region, which includes China, India andSoutheastAsia,showmuchhighergrowthratesthanotherregions. Oilhasasignificantgeopoliticalriskfactorinviewofthefactthatabout50%ofitsreservesareconcentratedintheMiddleEast.Japan’sdependenceofcrudeoilonthisregiondeclinedatonetime,buthasnowincreasedtomorethan80%ofitsimports.ThisisattributabletorisingdemandforoilinAsiancountries.Asthesecountrieshavechanneledthe
previouslyexportedoiltomeetoildemandintheirdomesticmarkets,theiroilexportstoJapanhavedecreased. ThesituationinwhichJapanprocuresliquefiednaturalgas(LNG)hasbeenchangingatafastpaceinrecentyears.Untilabout2000, JapanhadapredominantshareinglobalLNGtransactions,butitssharehasdiminishedtoabout30%today.AsChinaandIndiahavebeenrapidlyincreasingtheimportsofLNG,weexpecttheprospectofsharply-climbingdemandwellintothefuture.InJapan,whichhasfounditverydifficultto supplyelectricity fromnuclearpower stationsafter theGreatEastJapanEarthquake,LNGisincreasingitspresenceasamajor sourceofenergy,asnaturalgasproduces lessgreenhousegas(GHG)emissionsrelativetooil.Inaccordancewiththesituationabove,thesuppliercountriesarechangingaswell.IndonesiaandMalaysiahavebeentraditionalsuppli-ersofLNGtoJapan.Sincebothcountrieshavecontinuedtopostremarkablegrowth,theyhavefoundasustainedincreaseindomesticdemandforLNG.Asaresult,itforcedthemtocutbackLNGexportstoJapan. Inthemineralresourceminingsector,demandhasbeensurginginemergingmarketcountries.Inaddition,oligopolyhassignificantlydisturbedthedemand-supplybalance.Forexample, in the ironore industry the topthreecompaniesaccountformorethanhalfofworldseabornetradeinironore,andthetopfourcoalcompanieshavecreatedanoligopolyintheworldmarket.Furthermore,increasedexportsinresource-richAustraliahavecreatedportcongestion,forcingshipstowaitinline.Thisisfurthertighteningresourcesuppliesand,as
AsofJuly312012
Major Projects Over the Last 10 Years (Amountofloanfornaturalresourceprojects(signed):Approx$51Billion)
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JBIC Annual Report 2012
2
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
1. Energy, Natural Resources and Environm
ent Finance Group
aresult,thepricesofaffectedmineralresourcesaresoaring. Inthisway,variousrisksareincreasingbothonthedemandandsupplysides.ThismeansthatJapanesecompanieshaveaneedtodiversifytheiroverseasinvestments.JBICwillconductoperationsbyfocusingmorethaneveronstrengtheningrela-tionswithresource-endowedcountriesandsuppliers.
High Expectations on Natural Gas as Cleaner EnergyEspecially,JBICisstrivingtoobtainnaturalgasbydesignatingitasthetoppriority.WhathappenedattheFukushimaDai-ichiNuclearPlantletusconsiderthatastablesupplyofelectricpowerisanurgentissuefortheJapanesepeople’slivesandeconomic activities. As mentioned above, there are risingexpectationsforsupportingastableandaffordablesupplyofnaturalgasasamajorsourceofpresentenergy. Respondingtotheseexpectations,JBICisactivelysupport-ingacquisitionofinterestsanddevelopmentofLNG-relatedprojectsaswellastheimportofLNG. Amidthesedevelopments,JBICisalsosupportingacquisi-tionofinterestsin“unconventional”naturalgas,suchasshalegasandcoalbedmethane(CBM)1.In2011,JBICsupportedthefundingofJapanesecompaniesforacquiringinterestsinashalegasfield,itsdevelopmentandproductioninCanadaand for acquiring interests in anddevelopmentofCBM inQueensland,Australia,aswellastheliquefyingCBMintoLNG. Further, JBIC is making efforts to strengthen coopera-tivetieswithnaturalgas-producingcountries.InJune2011,JBIC signed a memorandum of understanding (MOU) withBPMIGAS,agovernmentagencyinIndonesiaforoverseeingandcontrollingupstreamoilandgasbusinessactivities,forthepurposeofbuildingabusinessmodeltoencouragefur-therexpansionofthetotalcapacityofnaturalgassupplyinIndonesiaandpromotinggas-relatedbusinessopportunitiesforJapanesecompanies.
Risk Diversification with Multiple Sources to Purchase Resources
Forsecuringastablesupplyofresources,itisimportanttodiversifyriskswithmultiplesourcestopurchaseresources. Firstly, geographical diversification needs to be consid-ered.Asdescribedabove,JapanisheavilydependentontheMiddleEastforoil.Thus,itshouldurgentlyexploreoilsupplysourcesfromoutsidetheMiddleEastanddiversifythemintheMiddleEastregion.RegardingLNG,JBIChasmadeloanstotheSakhalinIIProjectandLNGprojectsinPapuaNewGuineaandAustralia,etc.,therebycontributingtodiversificationofJapan’sLNGsupplysources.Regardingcoal,JBICprovidedaloanforthethermalcoaldevelopmentprojectinColombiafromwhichJapanhashardlyimportedcoal.Furthermore,JBIChasalsodiversifiedthetargetingcountriesbyapproachingtoMozambiqueandMongoliawhichareexpectedtopoten-tiallybecomenewmajorsuppliers.Inthesecountries,amajorthemeistomeettheneedsofthesecountrieswithproposals
thatdrawonJapanesetechnologyandpreviousperformance. Secondly,weshouldmakeuseoftheun-tapped“uncon-ventional” resources to date. In this area, development isunderwayforextra-heavycrudeoilinVenezuela,shalegasandshaleoilintheUnitedStates(U.S.)andothercountries.Forshalegas,JBIChasalreadyprovidedloanstoprojectsintheU.S.andCanada,and,forshaleoil,aloanwasmadetoaU.S.project.
Strengthening Multilayered Relations with Resource-Endowed Countries
Itisalsoimportanttostrengthenmultilayeredandstrategicrelationswith the resource-endowedcountrieswithwhichJapanhasbuiltgood,stablerelations. In recent years, oil-producing countries in the MiddleEasthavebeenpushingforwarddiversificationofindustriesandinfrastructuredevelopmentintheircountriesbasedonabundantrevenuesgeneratedbyhighoilprices.Theyhavelaidtheireyesonoverseasgovernmentsandbusinesscom-paniesinseekingsupportfortransplantingtechnologiesforthesepurposes.Inthiscontext,economicrelationsbetweentheMiddleEastandJapanhaveshiftedfromthetraditional,simplerelationshipbetweentheoilconsumersandsuppliersto“multilayered”tiesbysupportingindustrialdiversificationthrough cooperation for energy-related and infrastructuredevelopmentprojects aswell as joint investments in thirdcountries. Forexample,inSaudiArabia,JBICprovided,inMarch2006,aloaninprojectfinancing2tooneoftheworld’slargestpetro-chemicalplantsbeingplannedbySaudiArabianOilCompany(Saudi Aramco), a state-owned enterprise, by cooperatingwithemploymentcreationandindustrialpromotionwiththeproductionofhighvalue-addedproducts. FortheLNGprojectinQatar,JBIChassupportedanumberofkeylinksinformingtheLNGsupplychain,suchasnaturalgasfielddevelopment,LNGplantconstructionandloading
Thezinc,leadandsilvermineprojectinBoliviainwhichaJapanesecompanypar-ticipated.
1. Coalbedmethane(CBM)ismethaneextractedfromandnearcoalbeds.It isdrawingattentionalongwithshalegasas“unconventional”naturalgas.
2. Projectfinanceisafinancingstructurethatreliesprimarilyonthecashflowgener-atedbytheprojectforrepayment.Itisusedforfinancinglargeprojectsinsuchsectorsaspowergenerationandoil,gasorothernaturalresourcedevelopment.
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JBIC Annual Report 2012
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
1. Energy, Natural Resources and Environm
ent Finance Group
2ChinaandotherChinesepolicy-basedfinancinginstitutions,asitconsiderssecuringthechannelofexchanginginformationwithrespecttoindi-vidualprojectsandpolicytrendandexploringthepossibilityofcofinancingprojects.
Developing Resources as a Package DealSofar, Japanhasprocuredvariousresourcesas one of the leading buyers in the world.As China and other emerging countries areproceeding to engage in global competitiontoacquireresourcesagainstthebackdropofvigorouslyincreasingdemand,Japan’srelativepositionhasdeclined.
Underthesecircumstances,inordertohavesecureandstableaccesstovariousresources,JBICshouldnotconfineitself to supporting acquisition of interests and long-termdeliverycontractsbyJapanesecompanies.Rather,likeitsap-proachtoMiddleEasternoilcountries,etc.,itshouldproposecomprehensiveresourcedevelopment,whichencompassesthedevelopmentof infrastructure, suchas railways, roads,portsandelectricpowersystems,andincreasinglyadvancedindustries,etc., inaccordancewith theneedsof individualcountries.Althoughthisisonlyindirectlylinkedtoresourcedevelopment,whenJapanesecompaniesprovidetechnologiesforhighlyefficientcoal-firedpowergenerationandreductioninenvironmentalimpact,theycouldcontributetopowerde-velopmentandenvironmentalmeasuresinresource-endowedcountries. And these may well work as important factorsconducivetotheirfavorablepositioninacquiringinterestsinresourcesandpricenegotiation. JBICwillcontinuetoprovidefinancialsupportinvarioussectorsandthematicareas,includingsupportforinfrastructuredevelopmentinresource-endowedcountries,therebycontrib-utingtosecuringstablesuppliesofresourcesindispensableforthesounddevelopmentoftheJapaneseeconomy.
Efforts to GREEN OperationsDuringFY2011,JBICprovidedloanstoICICIBankLtd.BancoNacional de Comercio Exterior, S.N.C. (BANCOMEXT) andBancoCentroamericanodeIntegraciónEconómica(BCIE)forsupportingrenewableenergyandenergyefficiencyimprove-mentprojectsinIndia,Mexico,andtheLatinAmericaandtheCaribbeanregioninaneffortforGlobalactionforReconcilingEconomicgrowthandENvironmentalpreservation(GREEN)operations( see p. 69 for details of this initiative).Theseloansareexpectedtocontributetoreductioningreenhousegas(GHG)emissionsand,inevitably,helpthediffusionofJapan’sadvancedenvironmentaltechnologiesinthesecountriesandregions.( For JBIC’s efforts in the environment sector, see p. 53–55.)
portdevelopment,sincetheearlystageofitsdevelopmentinthe1980s.LNGproducedinQatarnowaccountsfor17%ofJapan’stotalimportofLNG.Atthesametime,JapanisthedestinationofthelargestvolumeofLNGexportfromQatar.Thisisagoodexampleofsecuringastable,long-termsupplyofLNGtoJapan,atthesametime,contributingtostrength-ening the relationshipbetween the two countries throughcontinuouscooperationintheworldLNGsupplychain. Australiaalsoaccountsforabout20%shareofLNG,60%of coal and 70% of iron ore procured by Japan. Given itsgeographicalproximity,politicalstabilityandabundanceofvariousresources,AustraliaisoneofthecountriesincreasinglyimportanttoJapanasaresourcesupplysource.JBIChasbuiltfavorablerelationshipswithitsresourcedevelopersthroughcontinuedfinancingovertheyears.Asdescribedabove,JBICsupportedunconventionalLNGprojectswhereCBMisusedforasarawmaterialandacquisitionofinterestsincoalbyJapanesecompanies.Further, JBICcultivatedrelationswithstategovernmentsbysigningMOUsoncomprehensivestrate-gicpartnershipswiththeWesternAustralianGovernmentandQueenslandGovernment.TheseMOUscontainanexchangeof information on investments Japanese businesses couldmakeandtheholdingofperiodicconsultations.Thus theyareexpectedtoleadtolayingthegroundworkforJapanesebusinessdevelopment. Inotheractivities,JBICsignedaMOUwiththeMinistryofFinanceofMongoliaforenhancingfinancialcooperation,in-cludingprovisionofcreditlines,withMongoliawheremineralresources,suchascoalandcopper,areabundant. ForTurkey,whichhasbecomeincreasinglyimportantinrecent years with its geopolitical location, bordering withMiddleEastern,NIS(NewIndependentStates)andEastEu-ropeancountries,JBICguaranteeditsprivatelyplacedSamuraibondissuetosupportthecountry’sefforttodiversifyfundingsources. In addition, although Japan and China tend to be in acompetitive relationship in theareaof resources, JBIChasbeenbuilding up relationswith the Export-Import Bankof
TheLNGprojectinQatarinwhichaJapanesecompanyparticipated.
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JBIC Annual Report 2012
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The Environment Surrounding JBIC
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Efforts o
f Three Finance Gro
ups
2. Infrastructure Finance Gro
up
withrivalcompaniesinothercountries,especiallythoseinfast-growingemergingmarketcountries.Inaddition,thehostcountrieshavecometoexpect infrastructuredevelopmentasacomprehensivepackagedealthatincludescooperationinperipheralareas,OperationandMaintenance (O&M)offacilitiesandrelevanthumanresourcedevelopment. ThusamajorthemeforJapanhasemerged:tomeettheneedstoahostcountrybyenergeticallyproposingan“inte-gratedinfrastructuresystem”inwhichtheprojectparticipantsget involved in thecomprehensiveworkassociatedwithagiveninfrastructureprojectbyprovidingadvancedtechnologyandknowhowasthecoreoftheirbusiness.
Strengthening the Overseas Deployment of Integrated Infrastructure Systems
TheJapanesegovernmentespousedinits“NewGrowthStrat-egy:BlueprintforRevitalizingJapan”decidedbytheCabinetinJune2010thepromotionoftheoverseasdeploymentofinte-gratedinfrastructuresystemssothatJapanachieveseconomicgrowthtogetherwithothercountries,especiallywithAsiancountries.Lateron,the“RebirthofJapan:AComprehensiveStrategy”decidedbytheCabinetinJuly2012embracedandexplicitlystatedthatitplacedhighpriorityonthepromotion
Recentyearshaveseenasharpincreaseindemandforservicesprovided by infrastructure, in-cludingelectricpowersystems,railways, roads,ports,airports,water supply and seweragesystems, in Asian and otherdeveloping countries register-ing high economic growth. Indeveloped countries, there isagrowingmomentumtomeetrisingdemandforreplacingan-tiquatedinfrastructurefacilities;developing new railway net-works;andgeneratingelectricitybyharnessingrenewableenergytoaddressenvironmentalprob-lems and globalwarming, andinstallingsmartgrids,etc. “TheNewGrowthStrategy:Blueprintfor Revitalizing Japan” (Cabinetdecisionin June2010)andthe“RebirthofJapan:AComprehen-siveStrategy”(Cabinetdecisionin July2012)encompassed thepromotionof theoverseasdeploymentofintegratedinfrastructuresystemsasastrategyformakingsuchenormousdemandforinfrastructureleadtoJapan’seconomicgrowth. JBICiscommittedtoactivesupportforJapanesecompa-niesparticipatinginvariousoverseasinfrastructureprojectsinsuchsectorsaspower,railway,port,road,waterandsew-eragesystemoperation,bydrawingon itsexperience inarangeofoverseasinfrastructureprojectsandbymakinguseofrelationshipsofmutualtrustcultivatedovertheyearswiththehostcountrygovernments.
Soaring Overseas Demand for Infrastructure ManyAsiancountrieshavingcloseeconomictieswithJapanhavebeenpostingsignificanteconomicgrowth.Demandforinfrastructure development in these countries is projectedtoreachatotalof$8trillionduringtheperiodof2010-20.1InEurope, investment in infrastructure isalsoprojected to€1.5–2.0 trillion (about$1.9–2.6 trillion2) inadopting smartgrids and renovating or newly building power generationfacilities.3 Intheworldasawhole,oneestimateprojecteddemandforinfrastructuredevelopmentwouldexceed¥1.2trillionannually.4 SuchoverseasinfrastructuredevelopmentmaywellbeanopportunityformanyJapanesecompaniesaswellasprefec-turalandmunicipalgovernmentstomakegooduseoftheiradvancedtechnologicalcapabilitiesdevelopedovertheyears.However,therecenttrendisthattheexportofasinglecompo-nentrelatedtoinfrastructureisexposedtopricecompetition
Infrastructure Finance Group2·
Japaneseequipmenttobeexportedasakeycomponentforanoverseaswaterinfrastructurebusiness(desalinationplantfacility)
1. AsianDevelopmentBank,“InfrastructureforaSeamlessAsia,”20092. Conversionrate:1euro=1.3USdollars3. TheEuropeanCommission,CommissionStaffWorkingPaperontheEurope2020
ProjectBondInitiative,“StakeholderConsultationPaper,”February28,20114. TheMinistryofEconomy,TradeandIndustry,AReportofthePractitioners’Review
Meeting,InfrastructureSystemExportSub-Group,TradeandEconomicCoopera-tionCommittee,IndustrialStructureCouncil,June2012
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JBIC Annual Report 2012
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◉ Power● Water■ Transport Infrastructure (ports, railways, roads, etc.)◆ Broadcasting, Telecommunication▼ Renewable Energy✚ Others
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✚ Infrastructure Fund Focusing
✚ Infrastructure Fund Focusing
▼ TSL for Renewable Energy-Related Project
The Latin Americanand Caribbean region
■ São Paulo Beltway (RODOANEL) Project
■ São Paulo Urban 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
Mexico
■ Panama Canal Expansion Project
Panama
◉ Porce III Hydroelectric Power Plant Project◉ Export of Water
Colombia
■ Intercity Express Programme
United Kingdom
◉ Export of Gas-�red Power Generation
Morocco
■ The Port of Durban Expansion Project◉ Power Transmission and Distribution Project
South Africa
■ Export for Metro Construction Project
Egypt
▼ TSL for Renewable Energy-Related Project
Turkey
◉ Export of Gas-�red Power Generation Plant
Kazakhstan
◉● Shuweihat S2 IWPP Project
◉● Fujairah F2 IWPP Project
◉ Shuweihat S3 Power Project
UAE
◉● Ras Laffan C IWPP Project
◉ Mesaieed A IPP Project
Qatar
■ The Sohar Port Expansion Project◉ Sur IPP Power 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◉ Cirebon Thermal Power Plant Project◉ Paiton Thermal Power Plant Expansion Project◉ Tanjung Jati B Coal-Fired Power Plant Expansion Project◉ Java-Bali Submarine Cables replacement project
Indonesia
North America and European
Asian Emerging
◉ Nong Saeng 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
◉ High Energy Ef�cient Coal-�red Power PlantManufacturing and Sales Project
▼ TSL for Renewable Energy-Related Project
▼ Equipment Export for Renewable Energy-Related Project
India
■ Chongqing Monorail Project
China
◉ Export of Gas-�red Power Generation Plant
Korea
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
2. Infrastructure Finance Gro
up
2
the United States and other developed countries to shiftfrommotorvehiclestorailsystems,inordertorespondtoincreasingconcernontheenvironment.InemergingmarketcountriessuchasVietNamandChina,ithasbeenpointedout that the increasingurbanizationandeconomicgrowthcallforhigh-speedrailwaysandurbantransitrailnetworks. Inthesesectors,thescaleofinvestmentfortheoverseasdeploymentofintegratedinfrastructuresystemsisexpectedtobesignificantlylarge.However,electricpowerandtransportprovidevitalservicesasfoundationsofeconomicactivityandthelivesofpeople.Bytheirverynature,theprovisionofsuchservicesdoesnotrecoupinvestedfundsinashortperiodoftimebymakingsignificantprofit.Itisforthisreasonthat,inadditiontotheprovisionofappropriatesupportbythehostcountrygovernment,stableand long-termfinancing that isnotvulnerabletochangeintheeconomyaswellascountryriskisimportantforsuccessfulprojects.
ofJapanesecompanies’participationtodevelopmentofover-seasintegratedinfrastructuresystems.JBICisthusdevotingitselftosupportingthisstrategy. Examples of deploying infrastructure as an integratedsystemareoftencited in thepower,water, transport andtelecommunication sectors. In the power sector, JapanesecompanieshavealongrecordofdeliveringorparticipatingintheprojectsforbuildingultrasupercriticalpowerplantsthatarecapableofgeneratingelectricpowerefficientlywithlessfuelthanpreviousplantsinAsia.Asdemandforelectricityisexpectedtogrowinemergingmarketcountries,therearerisingexpectationsonparticipatinginthebroaderscopeofworkrelatedtooverseaspowerprojects,includingnotonlybuildingandoperatinghighlyefficientpowerplants,butalsoinstallingsmartgridsandmeterswhichtransmitanddistributeelectricityefficientlybyexploitingInformationTechnology(IT). In the transport sector, there is growingmomentum in
AsofJuly312012
(Note)AnIndependentPowerProducer(IPP)buildsandoperatesapowerplantonitsownandsellstheelectricityproducedtopowerutilities. AnIndependentWaterandPowerProducer(IWPP)buildsandoperatespowergenerationandwaterdesalinizationplantsonitsown
andsellstheelectricityandwaterproducedfromthem.
JBIC’s Financing for Infrastructure Projects
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JBIC Annual Report 2012
2
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
2. Infrastructure Finance Gro
up
infrastructure-relatedfacilitiesandequipmentfromJapanesecompaniesandthefundingrequiredforJapanesecompanieswhentheyparticipateinprojectsasequityinvestors. Particularlyinrecentyears,theseinfrastructuredevelop-ment projects are not directly implemented by the publicsector. Instead,thereareincreasingcasesof implementingthem in the formofPublic-PrivatePartnership (PPP). In thecaseoflargeinfrastructureprojects,expectationsarerunninghighamongdevelopingcountriesthattheycanreducetheirgovernments’debtburdenbymakinguseofprivatesectorfundsthroughPPPandprovidemoreefficientinfrastructureservicesbymakinguseofprojectparticipantsintheprivatesector. JBIChassupportedanumberofsuchprojectswithproject financing andother finance schemes. In thesePPPprojects,governmentcommitmentanditscertainextentofinvolvementareexpected,andthekeytosuchprojectsishowtoallocaterisksandresponsibilitiesappropriatelybetweenthegovernmentandprojectparticipantsintheprivatesector.ThusJBICconsidersitasanimportantroletoprovideadvicewithrespecttoaninstitutionalframeworkindevelopingcoun-triesandsupportprojectstructuringfromtheearlieststagethroughmatchingthemutualneedsofdevelopingcountriesandJapanesecompanies,inadditiontosuchdirectfinancialsupport as lending. From this perspective, JBIC has beenmakingwayforwardinanarrayofefforts,includingfinancialdialogueswiththehostcountries. JBICwillcontinuetoperformtheroleofapolicy-basedfinancing institution in multiple aspects by supporting theexportofJapanesecompanies’plant-relatedmachineryandequipmentandbyactivelysupportingtheirparticipationininfrastructureprojectssothattheywillleadtocreationandexpansionoftheirbusinessopportunities.
Meeting New NeedsJBIChasfocusedmainlyonsupportingJapanesebusinessindevelopingcountries.Yet,asdescribedabove,demandforinfrastructureexistsnotonlyindevelopingcountries,butindevelopedcountriesaswell.Therearecountlessopportuni-tiesforinfrastructurebusinessindevelopedcountries,includ-inghigh-speedrailprojectsintheUnitedStatesandUnitedKingdomandurbantransitrailsandwatersupplyprojectsinAustralia.Inlightofthissituation,theJapanesegovernmenthaslaiddownalegalandinstitutionalframeworkconcerningthespecifiedsectors,suchasinfrastructure,whereJapanesecompaniesareconsideredtohavebusinessopportunities.Inthesesectors,JBICcannowoffer,jointlywithprivatefinancialinstitutions,exportloans(financeforsupportingtheexportofmachineryandequipmentfromJapan)andoverseasinvest-mentloans(financeforsupportingtheJapanesecompanies’overseasinvestment)indevelopedcountryprojects. JBIChasabundantexperienceinfinancinginfrastructureandplant-relatedprojectsinmanyAsianandotherdevelopingcountries.Byengaging inmoredialoguewithhostcountrygovernmentsand,inthatprocess,gettinginvolvedintheearlystagesoftheprojects,JBICintendstoprovidesupportinwaysthatwilleffectivelyandappropriatelyexploitthestrengthsofJapanesecompanieswithconsiderationtodemandsinhostcountries.
Performance and Recent Efforts of JBIC Todate,JBIChassupportedoverseasinfrastructurebusinessconductedbyJapanesecompanieswithavarietyoffinancialtools, including loans, guaranteesandequityparticipation.JBIChassupportedthefundingofdevelopingcountrygovern-ments, theiragenciesandprivatebusinesses forprocuring
ThethermalpowerprojectinIndonesiainwhichJapanesecompaniesparticipated.
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JBIC Annual Report 2012
Total responding companies
FY2007 FY2008 FY2009 FY2010 FY2011
(595)1.0%
16.8%
82.2%
(611)0.7%
20.1%
79.2%
(611)2.0%
32.2%
65.8%
(594)0.7%
16.5%
82.8%
(586)0.2%
12.6%
87.2%
■ Scale back/w
ithdraw
■ Maintain p
resent level
■ Strengthen/expand
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
3. Industry Finance G
roup
2
Industry Finance Group3·
Major Issues of Japanese Companies in Conducting Overseas Business Operations
AsthemajorissuesofJapanesecompaniesinconductingover-seasbusinessoperations,asharpappreciationoftheyencanbeaddressedfirstly.ThisisweighingonJapaneseexportersasaheadwindincompetingwiththeircounterpartsinemergingmarket countries such as China or Korea. Secondly, amiddifficultiesofobtainingdollarfinancingbyEuropeanprivatesectorfinancialinstitutions,triggeredbytheeurocrisis,itispossibletoconsiderthattheircreditstancewillnotchangefor thebetter,whichwillposeasubstantial financialchal-lengetoforeigncompaniesthatdesiretopurchaseproductsmanufacturedinJapanandJapanesecompaniesconductingoverseas operations. Thirdly, the progress in globalizationhasforcedmajorJapaneseindustriestocometogripswithincreasinglycomplexandlarge-scalesupplychainnetworks.Giventheseissues,theGreatEastJapanEarthquakeandthefloodinThailandhaveprovidedJapanesebusinesseswithanopportunitytoreviewtheirsupplychains.
Active Overseas Investment by Japanese CompaniesBesides the above situation, the appreciated yen broughtaboutprominentoverseasinvestmentsbyJapanesecompa-nies.Foreigndirectinvestment(FDI)madebyJapanesecom-paniessincethe1980shavetwomajorpeaks:oneoccurredintheearly1990sinresponsetothesoaringyenfollowingthePlazaAccordandtheotheroccurredin2008justbeforetheLehmanShock;thoughthesecondsurgeturnedaroundtosubsidein2009and2010.InFY2011,however,FDIroseby108%toabout¥10.1trillion.TheincreaseisparticularlypronouncedinAsia(whereFDIroseby42%toabout¥3tril-lion)andinEurope(whereFDIroseby127%to¥3.2trillion).1 Especially under the present circumstances where the
1. [Source]MinistryofFinanceJapan
Japanesecompany’sautomobilepartsfactoryinIndia(fromBestexKyoeiCo.,Ltd.)
Figure 1-1 Medium-term Prospects (next 3 yrs. or so) for Overseas Operations
(Note)1.“Overseasoperations”isdefinedasproduction,sales,andR&Dactivitiesatoverseasbases,aswellastheoutsourcingofmanufacturingandprocure-mentoverseas.
2.Thenumbersintheparenthesesabovethebargraphsindicatethenumbersofrespondingcompaniestothequestion.
3.Mid-tierfirms/SMEsarecompanieswhosepaid-incapitalislessthan¥1billion.
[Source]ResultsoftheJBICFY2011Survey:—OutlookforJapaneseForeignDirectInvestment(23rdAnnualSurvey)—
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JBIC Annual Report 2012
01 02 03 04 05 06 07 08 09 10 1120
25
30
35
40
(FY)
(%)
Overseas Sales Ratios
Overseas Production Ratios
27.9
29.1
33.5 34.034.7 34.7
35.9
33.3
34.2
34.2
38.5
31.030.830.630.5
29.2
28.0
26.126.0
24.6
FY2011 projected
Medium-term plans (FY2014)
Total Amount
5,371.1 billions of yen
Oceania11%
Europe(Including Russia)
23%
Africa 3%
Asia23%
The Middle
East12%
North America
12%
Latin America and the Caribbean
17%
(FY2007–2011) 2
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
3. Industry Finance G
roup
have a strong intention to expand overseas business (seeFigure 1-1). Both the overseas production and sales ratiocontinuedtogrow,andtheirgrowthseemedtohavegainedmomentumaftertheLehmanShock.Theoverseasproductionratioisforecasttoincreasefurtherandreachcloseto40%overthecomingyears(seeFigure1-2).Whatisworthnotinghereisthatofthecompanieswithanintentionto“strengthen/expand”overseasoperations,about90% replied that theywouldmaintainorexpanddomesticoperations.
Supporting Overseas Business Deployment by Japanese Companies
Giventhesituationandcorporatetrendsdescribedabove,JBICissupportingtheoverseasbusinessdeploymentofJapanesecompaniesfromvariousaspectstomaintainandimprovetheinternationalcompetitivenessof Japanese industries.FirstlyJBICissupportingoverseasinvestmentbyJapanesecompaniesbyprovidingfundsforpurchaseofcapitalequipmentrequiredforoverseasbusinessoperationsandsalesfinancingbymak-ingmostuseofprojectfinanceandlocalcurrencyfinance.
Supporting Ship and Plant ExportsAstheyenishoveringathighlevels,JBICisalsoactivelysup-portingtheexportof Japanesecompanies. Inparticular,aseconomicturmoilinEuropedeepensandstretchesout,result-inginamoreconservativecreditstancetakenbyEuropeanprivatefinancialinstitutionsthanpreviously,therearestrongexpectations on JBIC, as a Japanese policy-based financial
Japanesedomesticmarketwill inevitablycontractwiththedecliningbirthrateandagingpopulation,agrowingnumberofJapanesecompaniesaremakingeffortstocapturepartofthedemandinemergingmarketcountries,primarilyinAsia,thecentralpillarofworldgrowth.Inparticular,whatstandsoutisthatawiderangeofindustriesandsectorsaredevelopingproductstargetingthemiddleincomeclassinemergingmar-ketcountries,calledthe“volumemarketsegment.”Japanesecompaniesarealsoformingjointventures,offeringJapanesetechnologieswithlocalcompaniesinemergingmarketcoun-triesinanefforttocreateanewmarketthere.Atthesametime,asmajorJapanesecorporationsareexpandingoverseasproductionandlocalprocurement,domesticmid-tierenter-prisesaswellassmallandmediumenterprises(collectively"SMEs")areactivelyworkingtoexpandoverseasoperations. TherecentcontinuedyenappreciationhasalsoboostedoverseasM&Aactivities.Therewere624mergersandacquisi-tionsofforeigncompaniesworth¥5,780billionbyJapanesecompanies in FY2011, which set a record, exceeding theprevioushighachievedinFY2008.2 SuchatrendwasidentifiedintheFY2011SurveyReportonOverseasBusinessOperationsbyJapaneseManufacturingCompanies(whichdescribesthefindingsofthe23rdsurveyconductedfromJulytoSeptember,2011,with603companieshavingresponded).( see p. 56) For example, as formid-termprospects (next 3 yrs. orso)foroverseasoperations,thenumberofJapanesemanu-facturingcompanieswillingto“strengthen/expand”overseasbusinessincreasedtoarecordlevel(87.2%).TheseresponsesclearlyshowedthatJapanesemanufacturers,includingSMEs,
Figure 1-2 Ratios of Overseas Production and Overseas Sales Figure 2 Overseas Investment Commitments by Region
(Note)1.(OverseasProduction)/(DomesticProduction+OverseasProduction) 2.(OverseasSales)/(DomesticSales+OverseasSales) 3.Ratioswerecalculatedbysimplyaveragingthevaluestherespondentcompaniesprovided[Source]ResultsoftheJBICFY2011Survey:—OutlookforJapaneseForeignDirectInvestment(23rdAnnual
Survey)—
2. [Source]ThomsonReuters.
(Note)ThetabledoesnotincludeTSLsforJapaneseprivatefinancialinstitutions,etc.
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JBIC Annual Report 2012
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産業ファイナンス部門
The Environment Surrounding JBIC
Challenges and
Efforts o
f Three Finance Gro
ups
3. Industry Finance G
roup
2paredwithlargecorporations,JBIChavebeensupportingtheiroverseasbusinessexpansionbyprovidingvariousinformation,includingtheforeigninvestmentclimate,inadditiontosup-portingthembyprovidingloansandotherfinancingproducts.( see p. 49–52)
Responding to the Flood Disaster in ThailandThefloodthathitThailandinOctober2011inflictedsubstan-tialdamageonanumberofJapaneselocalsubsidiariesandaffiliates.Tosupporttheirrehabilitationandbusinessactivities,JBICsignedatwo-steploanagreementwithKASIKORNBANKPublicCompanyLimited,acommercialbankinThailand,tar-geting localsubsidiariesandaffiliatesof JapaneseSMEsaswellas localcompaniesthatconstitutesupplychainswithJapanesecompanies.JBICalsofinanceslocalJapanesesub-sidiariesandaffiliateswhosustaineddamagefromthefloodforreplacingmachineryandequipment.
Accurate Response to NeedsJBICwill continue to actively support Japanese companiesbyeffectivelydrawingona rangeoffinancial facilitiesandschemes, including loans, equity participations and guar-antees, tomeet theirneedswithaccurateresponse,whilerecognizingvariousissuesofJapanesecompaniesindeployingtheiroverseasbusiness,inordertomaintainandimprovetheinternationalcompetitivenessofJapaneseindustries.
institution, for providing credit primarily to ship and plantexporttransactions,towhichJBICispositivelyresponding.
Supporting Foreign M&A Activities under the Emergency Facility in Response to Yen Appreciation
FollowingtheEmergencyPackageAgainstYenAppreciation,apolicypackagereleasedbytheGovernmentofJapaninthefaceofthesharplyclimbingvalueoftheyen,JBIClaunchedtheemergencyfacilityinresponsetoyenappreciationtotakeadvantageofthehighervalueoftheyen.Underthisfacility,JBICissupportingJapanesecompaniesforacquiringforeigncompaniesanddevelopingaswellasacquiringinterestsinoverseasnaturalresources,etc. ToencourageM&Aactivities,JBICnotonlymakesdirectinvestmentbutalsoprovidesM&Acreditlinesfordomesticfi-nancialinstitutionstoexpeditiouslyandflexiblyfundJapanesecompanieswithmediumandlong-termforeigncurrenciesforoverseasM&Aactivities.
Supporting Overseas Business Deployment by SMEs ThesuperiortechnologicalcapabilitiesofJapaneseSMEshavereceivedhighcreditathomeandabroad.Atthesametime,developingcountriesthemselvesarefocusingeffortsonat-tractinginvestmentsfromthecompanieshavingsophisticatedtechnologies.However,asSMEsoftenhaveconstraintsonfinancing,collectinginformation,andhumanresourcescom-
ThesiteoftherefineryandpetrochemicalplantprojectinwhichJapanesecompaniesparticipated
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