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The Japan Bank for International Cooperation (JBIC) has signed a loan agreement totalling US$100mn with Banco Nacional de Comercio Exterior (Bancomext), a government financial institution in Mexico. The loan is being co-financed by Bank of Tokyo-Mitsubishi and Mizuho Corporate Bank, with JBIC providing a guarantee for their tranche. 

JBIC will extend a long-term funding plan (in principle more than five years) to Mexican corporations in which Japanese firms hold an equity stake. This will take place through Bancomext, which will provide Mexican businesses with long-term stable financing.

The Japan-Mexico economic partnership agreement came into effect on April 1. Japanese companies have been active investors in Mexico, with around 300 Japanese companies operating businesses in the country (as of the end of 2002). The partnership agreement is expected not only to promote Japan-Mexico trade through the lifting or reduction of duties, but will also accelerate and further expand Japanese direct investments in Mexico, through equal national treatment and most favoured nation status. 
It is within this context that JBIC and Bancomext forged the loan agreement to financially support Japanese companies’ investments in Mexico, an issue that the government of Mexico places high on its policy agenda. 

The Mexican macroeconomy has been on a stable growth path, registering 4.4% growth in 2004, and recording an average growth rate of 2.1% over the past three years.  Mexico is expected to pursue a continuing growth path over the coming years. With such favourable conditions, Japanese firms are participating in the Mexican economy not only by investing in the manufacturing sector but also in infrastructure development projects such as the clean development mechanism (CDM) candidate power project under the Kyoto Protocol.