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http://www.bloomberg.com/news/print/2010-09-06/jbic-to-lend-2-5-billion-this-fiscal-year-for-environment-projects-abroad.html
The Japan Bank for International Cooperation plans to offer $2.5 billion in loans this fiscal year for clean-energy and water-supply projects abroad to help Japanese companies market their environmental technologies.
The state-controlled lender known as JBIC will seek to ally with local commercial banks to provide syndicated loans totaling about $5 billion for such projects in the 12 months through March 2011, Takashi Hongo, head of the bank’s environment finance engineering section, said yesterday.
Japan is counting on exports of technologies such as smart electricity grids, water-supply systems and power generators requiring less coal to spur growth as demand weakens at home. The International Energy Agency estimates the world must boost spending on energy efficiency and clean technology by $400 billion a year in the next two decades to tackle global warming.
“The world needs a vast amount of money to invest in infrastructure and fuel-saving power plants and other energy projects, in particular in developing nations like India and Indonesia,” Hongo said in an interview in Tokyo. “Our role is to take the initiative and attract private banks to finance those projects.”
Under a financing program dubbed the Leading Investment to Future Environment Initiative, or LIFE, the bank lent about $2.7 billion last fiscal year as part of $5.4 billion of syndicated loans. JBIC had originally planned to allocate the amount over two fiscal years. Demand for financing through the program was stronger than expected from Japanese investors, Hongo said.
India-U.S. Partnership
India has allied with the U.S. Department of Energy to provide funding to local developers of clean energy projects. The Indo-U.S. Joint Clean Energy Research and Development Center, set up by the two governments, ran an advertisement in the Times of India newspaper on Sept. 6 seeking applicants. Initial priority areas are solar, advanced biofuels and energy efficiency of buildings, the ad said.
JBIC lends for initiatives that involve Japanese companies or use the country’s resource-efficient technologies. In March, it signed loan contracts for power plant projects in Indonesia and Mexico that involved Tokyo Electric Power Co., Mitsubishi Corp. and Mitsui & Co., according to a statement from the bank.
Carbon Offset
Hongo said he expects JBIC to further boost financing for overseas projects as Japan seeks carbon-offsetting accords with Asian nations including India, Indonesia and Vietnam. Under the proposed agreements, Japan would earn emission-reduction credits and offset its own pollution by investing in projects that cut heat-trapping gases in the developing nations.
The 1997 Kyoto climate-protection treaty has a similar program called the Clean Development Mechanism. Concerns have grown over the possible end of the United Nation-brokered mechanism when the Kyoto Protocol expires at the end of 2012.
Japan’s economic recovery is losing steam as demand weakens at home and abroad, Standard & Poor’s said on Sept. 1. Exports only have “limited scope” to keep driving growth because of moderating expansions in Japan’s largest overseas markets, the rating company said.
“Expanding Japan’s exports and creating jobs are the missions that always come with our financing of overseas projects,” Hongo said.
