The Japan Bank for International Co-operation (JBIC) and the Bank of Tokyo-Mitsubishi UFJ (BTMU) have extended a US$100mn loan to India’s ICICI Bank to finance steel manufacturing and exports.

Through ICICI, the loan will finance Jamshedpur Continuous Annealing and Processing Company (JCAPCPL), a joint venture of Nippon Steel & Sumitomo Metal Corporation (NSSMC) and Tata Steel (TSL), for manufacturing and sales of cold rolled steel sheets in the Indian State of Jharkhand, to meet growing demand for high grade steel sheets for cars in India and neighbouring countries.

JBIC contributed US$60mn towards the deal, and also signed a loan agreement with JCAPCPL to fund this business operation in November 2012.

“The Indian automobile market is expected to grow over the medium and long term, and demand for high grade cold rolled steel sheets for automobiles, in which NSSMC has strength, is foreseen to increase in parallel to this trend. Thus NSSMC intends to boost the local manufacturing of steel sheets for automobiles in the joint venture with TSL and is planning to supply the products to Japanese and western automobile and auto-parts manufacturers. The loan will thus contribute to maintaining and improving the international competitiveness of the Japanese steel industry by supporting NSSMC’s overseas business operation,” JBIC says in a statement.

JBIC and ICICI have previously collaborated on trade finance during the financial crisis, as well as the development of the local supporting industries, renewable energy and energy efficiency projects and export of thermal power plant facilities.