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Japan Bank for International Cooperation (JBIC) has signed a loan agreement totalling US$100mn with the Central American Bank for Economic Integration (Cabei).  The loan was cofinanced with private financial institutions (Mizuho Corporate Bank (agent bank), Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking Corporation, and the Tokyo branch of Banco Bilbao Vizcaya Argentaria), with JBIC providing a guarantee for the portion financed by them. 
Established in 1960 as part of the Central American integration process, Cabei is the leading multilateral institution in the financing of regional integration and the development of Central America. The loan will fund, by way of Cabei, capital investments and associated working capital needed over the long term for candidate Clean Development Mechanism (CDM) projects in the Central American region.
Ever since JBIC signed a cooperation agreement on CDM with Cabei in July 2004, the two institutions have been closely exchanging information on CDM projects in the region. Such progress in cooperation has led to this loan.
To date JBIC has made a contribution to the Japan GHG Reduction Fund (JGRF) and signed cooperation agreements with foreign institutions to help achieve Japan’s greenhouse gas (GHG) emissions reduction target under the Kyoto Protocol.  While JBIC has provided loans for individual CDM candidate projects, this is the first loan to finance multiple CDM candidate projects by way of an overseas financial institution.
To achieve Japan’s GHG emissions reduction target under the Kyoto Protocol (6% reduction from the 1990 level), it is crucial for Japan to utilise the Kyoto Mechanisms, including the CDM, in addition to making domestic efforts to reduce emissions with various measures. 
“The Plan to Achieve the Target under the Kyoto Protocol “adopted in the cabinet decision on April 28, 2005 noted the importance of acquiring emission reduction credits with full utilisation of the Kyoto Mechanisms. In the Central American region, efforts are underway to advance CDM projects.  As a result, 3 out of 13 CDM projects approved by the CDM executive board are located there as of August 6, 2005. 
This loan will provide financial support for the formation of CDM projects in this region, thereby providing Japanese companies with possibilities of obtaining certified emission reduction credits and helping to achieve Japan’s emissions reduction target under the Kyoto Protocol. 
This year marks the 70th anniversary of the establishment of diplomatic relations between Japan and five countries in Central American region. In commemoration, this year is designated as “the Japan-Central America Year 2005 ‘, and a number of political, economic and cultural events have been taking place.
This loan was signed on the occasion of the Japan-Central America Summit Meeting held recently. In July 2004, JBIC had provided an export credit line for Cabei to support Japanese exports of machinery to the Central American region. JBIC is assisting closer economic ties with Japan and the Central American region, and this loan is expected to lead to the strengthening of the relations between them.