Japan Bank for International Cooperation (JBIC) has signed an agreement for an untied loan totalling US$50mn with Banco de Comercio Exterior de Colombia (Bancoldex). This loan was co-financed with private financial institution (Bank of Tokyo-Mitsubishi, Ltd), with JBIC providing the guarantee for the co-financed portion.
The loan will enable Bancoldex to on-lend medium- and long-term funds to private-sector firms in
Colombia’s export sector continues to rely on traditional products such as petroleum, coffee and coal. As a result, the country’s trade structure is vulnerable because it is easily influenced by the international commodity markets. While the government of Colombia is pursuing export expansion by promoting non-traditional industries, including automobile and electric appliances, there is a shortage of medium and long-term funds in domestic financial markets. This loan is intended to meet such financial needs, thereby increasing the country’s exports and eventually contributing to the improvement of the current account balance.
In Colombia’s automobile and electric appliance industries, local companies with Japanese equity stakes are operating. In many cases, they import foreign parts and employ knockdown production and export finished products to the third countries. Thus the loan is also expected to provide financial support to such external transactions of local Japanese affiliates.