Japan Bank for International Cooperation
|This article is part of the CoalSwarm coverage of Japan and coal.|
The Japan Bank for International Cooperation, also known by its acronym, JBIC, is a Japanese public financial institution and export credit agency that was created on October 1, 1999, through the merge of the Japan Export-Import Bank (JEXIM) and the Overseas Economic Cooperation Fund (OECF).
JBIC is the international wing of the Japan Finance Corporation (JFC) (administered by the Ministry of Finance) established on October 1, 2008. The bank is wholly owned by the Japanese government, and its budget and operations are regulated by the JBIC law. It is headquartered in Tokyo and operates in 18 countries with 21 offices. The main purpose of the institution is to promote economic cooperation between Japan and overseas countries by providing resources to foreign investments and by fostering international commerce. It has a major role in promoting Japanese exports and imports, and the country's activities overseas. The bank's presence can be seen both in developed and developing countries. It tries to contribute to the stability of the international financial order and to the promotion of sustainable development. It follows a policy of not competing with ordinary financial institutions. The bank is one of the instruments of Japan's official development assistance (ODA), which contributes to the execution of the country's foreign policy. As it aims at sustainable development, JBIC is concerned about social and environmental issues, and requires environmental impact assessment studies to provide funding to any project.
Coal funding as climate finance
Japan had been criticized for counting its loans for coal plants as climate finance - money promised by wealthier countries in UN climate talks to help less wealthy countries limit their carbon emissions. Japan states that it has provided US$16 billion in climate finance since 2013. Yet the UN has no rules defining climate finance, meaning governments decide for themselves what projects to include in their accounting. Japanese officials argue the coal projects are climate-friendly because the plants use technology that burns coal more efficiently, reducing their carbon emissions compared to older coal plants, while critics say the funds should go to low-carbon technologies like renewables.
January 2014: JBIC Approves Loan for Kudgi Super Thermal Power Project in India
On January 25, 2014, JBIC, upon the Prime Minister of Japan Shinzo Abe's visit in India, signed a loan agreement with the Indian state power agency NTPC. The agreement provided for JBIC to provide US$155 million and a US$55 million loans directed toward purchase of steam turbine generatorss from Toshiba and boiler water feedpumps from Ebara for the Kudgi Super Thermal Power Project, a 2400 MW power station under construction in Karnataka state, India. In addition to the JBIC portion, Sumitomo Mitsui Banking Corporation will also provide cofinancing for each facility, bringing the total financing for steam turbine generators to US$259 million and the financing for boiler water feedpumps to US$ 91 million.
Coal plants funded by JBIC
- Tanjung Jati B power station (Indonesia)
- Kudgi Super Thermal Power Project (India)
- Thai Binh Power Center (Vietnam)
- Safi power station (Morocco)
- Matarbari power station (Bangladesh)
Inauguration of the new JBIC
Following the passage of the Japan Finance Corporation Law on May 18, 2007, during the 166th Ordinary Diet Session, the international financial operations (IFOs) of Japan Bank for International Cooperation (JBIC), National Life Finance Corporation (NLFC), Agriculture, Forestry and Fisheries Finance Corporation (AFC), and Japan Finance Corporation for Small and Medium Enterprise (JASME) will be merged on October 1, 2008, to become a new policy-based financing institution, tentatively called Japan Finance Corporation (JFC).
To maintain the international trust and confidence enjoyed by JBIC, the international finance sector of JFC will continue to use the name Japan Bank for International Cooperation (JBIC).
Overview of the new JBIC
The new JBIC constitutes the international finance sector of Japan Finance Corporation (JFC), a policy-based financing institution.
The new JBIC performs the following three functions to contribute to sound development of the international economy, including Japan:
- Promote overseas development of strategically important natural resources
- Support Japanese industry efforts to develop international business operations
- Respond to financial disorder in the international economy
In addition to the above functions, the new JBIC will take over, on a separate account, financial operations for effective realignment of the US military forces stationed in Japan pursuant to the relevant special legislation.
Key operational principles
The new JBIC will conduct business operations based on the following principles:
- Well-focused policy-based financing: As a policy-based financing institution, the new JBIC shall conduct speedy and well-focused operations based on policy needs in response to economic and financial situations in Japan and abroad.
- Complementing private-sector financial institutions: To effectively perform the functions required for policy-based financing, the new JBIC shall take account of situations where private-sector financial institutions are placed in their international finance activities and supplement them.
- Sufficient revenues to cover expenditures: Pursuant to the Japan Finance Corporation Law, the new JBIC shall make efforts to maintain the financial soundness of its international finance operations.
- Maintaining and improving international trust and confidence to conduct adequate international finance operations and effective funding operations, the new JBIC shall maintain and improve the international trust and confidence enjoyed by JBIC.
- Conducting business operations by drawing on its expertise and initiatives: The new JBIC shall conduct operations by drawing on its own expertise and initiatives on international finance.
Of the two types of operations conducted by the current JBIC, JFC will take over IFOs in its international finance sector. However, to maintain international trust and confidence enjoyed by JBIC, the international finance sector of JFC will continue to use the name of JBIC as it conducts international finance operations.
JBIC is currently the international wing of Japan Finance Corporation (JFC) established October 1, 2008. "The predecessor of JBIC is the International Financial Operations of former JBIC. JFC will take over IFOs in its international wing. However, to maintain international trust and confidence enjoyed by JBIC, the international wing of JFC will continue to use the name of Japan Bank for International Cooperation (JBIC) as it conducts international finance operations."
JBIC has mainly two ways of performing its loans: international financial operations (IFOs) and overseas economic operations (ODA). These operations are independent of each other and are clearly separated in the bank's financial statements.
The IFO operations include loans and equity participation in overseas projects of Japanese corporations, therefore contributing to Japanese activities overseas. These operations are aimed at both developed and developing countries. As of March 31, 2006, the IFO operations accounted for ¥985.5 billion.
The ODA operations are aimed mainly at developing countries, especially those in Asia, which accounted for 15.8% of the bank's operations in 2004 fiscal year. These operations provide long-term and low-interest loans to important projects that develop social structure and infrastructure of developing countries. The JBIC's financial assistance represents 40 percent of Japan's official development assistance. As of March 31, 2006, the ODA operations accounted for ¥770 billion.
As of March 2005, the country which had access to the most loans was Indonesia, followed by China and the Philippines. Brazil was the most benefited from South American countries, holding the sixth place in the bank's investments.
- Official website: http://www.jbic.go.jp/en
Articles and resources
Related GEM.wiki articles
- "Birth of Japan Bank for International Cooperation". Japan Bank for International Cooperation. October 1, 1999. Archived from the original on August 23, 2003.
- "Guidelines for Confirmation of Environmental and Social Considerations" (PDF). Japan Bank for International Cooperation. April 2012.
- "Japan Uses Climate Cash for Coal Plants in India, Bangladesh," AP, Mar 25, 2015
- "Loan for India's National Thermal Power Company," JBIC press release, January 27, 2014
- "Profiles of JFC and JBIC" (PDF). Japan Bank for International Cooperation. Retrieved May 17, 2013.
- "Profile". Japan Bank for International Cooperation. Archived from the original on August 28, 2005.
- "Quem Somos: Volume Financeiro". Japan Bank for International Cooperation. Archived from the original on September 8, 2005.
- "Atividades do JBIC no Brasil". Japan Bank for International Cooperation. Archived from the original on March 26, 2007.