The Japan Bank for International Cooperation (JBIC) has signed a loan agreement totaling up to ¥15.8bn (US$139mn) with the government of Venezuela. The buyer’s credit loan 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. IAFE (Instituto Autonomo de Ferrocarriles del Estado), the national railway company in Venezuela, is implementing a new railway construction project aimed at improving traffic conditions in the Caracas metropolitan area by providing a 45km linkage between Caracas, the capital city, and Tuy Medio, a neighbouring city.
The Caracas metropolitan area, the centre of the Venezuelan economy, is facing a major problem of chronic traffic congestion caused by excessive concentration of population and industries. The 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 neighbouring cities and lessen overpopulation in Caracas.
This is the first loan from JBIC to Venezuela in five years. 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 and gas producing countries in the world and a promising export market for transport and resource-related plants.