Nippon Export and Investment Insurance (Nexi), Japan’s export credit agency, has inked partnership agreements with three international financial institutions to accelerate trade and investment in Africa by Japanese companies.
The deals were struck with the Islamic Development Bank (IsDB), Islamic Corporation for the Insurance of Investments and Export Credit (ICIEC) and African Trade Insurance Agency (ATI). These partnerships will lead to the establishment of a “co-operative framework to promote setting up projects” on the continent, Nexi says.
Nexi and ATI are also collaborating on the launch of a Japan desk, to be housed by ATI in Nairobi. The desk will provide tailored risk mitigation support to Japanese companies and investors doing business in Africa.
A spokesperson for ATI tells GTR that the desk will be headed up by ATI underwriter Annabelle Buzingo, a recent recruit who joined at the start of the year from Export Development Canada. She will be supported in the role by an ATI credit analyst.
In a release, Nexi says that it will conduct a trade and investment insurance training programme for staff from each of the three institutions, who will then work as Japan desk officers to create a supportive environment for Japanese companies.
“We are very pleased to announce that the Japan desk will be set up in ATI to support African projects so that Japanese companies can obtain easy access to the reliable risk mitigation solution provided by ATI,” says Nexi chairman and CEO Atsuo Kuroda.
The African market provides great potential for Japanese companies to enter into due to the continent’s strong demand for infrastructure, Nexi says in a release. But, it says, companies are hampered by bigger hurdles than when they operate in Asia. “One of the bottlenecks [in Africa] is that some part of project cost shall be financed without official export credits support, but many governments in Africa still face difficulty in borrowing such money from commercial banks without official export credits support,” it says.
In response, Nexi plans to facilitate financing proposals from Japanese companies through active underwriting, as well as by establishing these “closer ties” with the IsDB, ICIEC and ATI.
Meanwhile, ATI has recently penned agreements with two Japanese banks, Sumitomo Mitsui Banking Corporation and Mizuho Bank, having previously also signed an agreement with Mitsubishi UFJ Financial Group.
“The agreements signal to the world that Japan views Africa as a strategic investment destination, which will also provide an opportunity for Japanese companies and investors to more effectively capitalise on the current opportunities in the fastest growing continent in the world,” ATI says.
ATI has a current pipeline of over US$1bn-worth of transactions from Japanese banks.
All of these new Japan-Africa agreements were signed on the sidelines of the Tokyo International Conference of Africa’s Development, which concluded at the end of last month.