Japan Bank for International Cooperation (JBIC) has signed a loan agreement for ¥15.8bn with the government of Venezuela. The buyer’s credit is co-financed with Mizuho Corporate Bank (agent bank), Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi, and Société Générale Bank (Tokyo branch).

The loan will support exports of railway-related equipment from Japan, including a set of railway car maintenance depot facilities, control equipment, and signal and communications equipment, for which an international consortium including Marubeni Corporation has been awarded a contract by the Instituto Autonomo de Ferrocarriles del Estado (IAFE), the national railway company in Venezuela wholly-owned by the government.

IAFE is implementing a new railway construction project aimed at improving traffic conditions in the Caracas metropolitan area by providing a 45km linkage between Caracas and Tuy Medio, a neighbouring city.

In 1992, when the same international consortium was awarded a contract for railway-related equipment including railway cars, rail tracks, and signal and communications equipment, JBIC and Japanese private banks provided a loan totalling ¥14.7bn for their export. The new loan will support the export of additional equipment necessary for the completion of the project. The utilisation of Japanese advanced technology is expected to contribute to safe and efficient railway operations. JBIC continues to support transport infrastructure development in Venezuela by supporting Japanese firms in receiving orders.

The Caracas metropolitan area, the center of the Venezuelan economy, is facing a major problem of chronic traffic congestion caused by excessive concentration of population and industries. This project is expected to alleviate serious traffic jams in the city by constructing a mass transit system which links the city of Caracas and suburban cities for commuters. It is also expected to develop the neighboring cities and lessen overpopulation in Caracas.

This is the first loan from JBIC to Venezuela in five years, the last being in September 2000. The loan is expected to boost chances for Japanese firms to receive orders for exports to Venezuela, thereby contributing to closer trade relations between the two countries. JBIC intends to provide active and continuous support for plant exports and other business activities by Japanese firms involving Venezuela, as it is one of the major oil, gas and other resource producing countries in the world and a promising export market for transport and resource-related plants.