Japan Bank for International Cooperation (JBIC) has signed an agreement for a buyer’s credit facility totalling up to around US$154mn with National Petrochemical Company (NPC) of Iran to provide an export credit facility in the form of a direct credit to finance Japanese firms’ exports to Iran.
The facility is cofinanced with HSBC, Tokyo (agent bank) and ING Bank, Tokyo.
This loan will finance the export of equipment and services by corporate syndicates, including Mitsui Engineering & Shipbuilding for the construction of a high density poly-ethylene plant with an annual production capacity of 300,000 tons in Ilam in the western part of Iran. Ilam Petrochemical Company, a subsidiary wholly-owned by NPC, is in charge of implementation of the project.
Whereas JBIC has provided export credit facilities to Iran since the resumption of credits in March 2001, all the facilities previously provided were guaranteed by the Iranian government. However, JBIC has decided to take on directly the credit risk of NPC, one of the highly-rated governmental enterprises in Iran, following the previous export credit facility for its fertiliser project. This is the second facility without Iranian government guarantee that JBIC has provided to Iran.
This facility is expected to increase the chances of Japanese firms receiving export orders from NPC, thereby contributing to closer trade ties between Japan and Iran, one of the world’s major oil-producing countries.