The Japan Bank for International Cooperation (JBIC) has signed a loan agreement totalling US$900mn for a refinery modernisation project with the Brazilian corporation Companhia de Desenvolvimento e Modernizacao de Plantas Industriais (CDMPI) in which Mitsui & Co and Itochu have equity stakes.

The loan was co-financed with Sumitomo Mitsui Banking Corporation and six other private financial institutions.

The aim of the project is to strengthen the refining capacity, upgrade product quality, and alleviate environmental impacts by modernizing the Henrique Lage Refinery (Revap).   Revap is the third largest refinery in Brazil and is owned by Petrobas, the Brazilian international energy company.  The loan will finance installation of the oil refinery and other facilities that CDMPI will lease to Petrobras.

Through this loan, JBIC will help upgrade the inadequate refining facilities in Brazil.  The modernisation of such facilities is a critical aspect of the government’s energy policy and the newly signed loan is expected to contribute to energy policy by enhancing Brazil’s oil refinery capacity.

This loan will also help JBIC support Japanese firms’ overseas business activities. Participation in the project may provide Japanese trading houses Mitsui & Co and Itochu, with a significant opportunity to become further involved in Petrobras-related oil, natural gas and resource development projects.