The Japan Bank for International Cooperation (JBIC) has agreed to provide a US$30mn loan to the integrated steel manufacturer JSW Steel in India, after signing an individual buyer’s credit agreement yesterday.
JSW Steel will receive a total of US$49mn in co-financing from JBIC and Mizuho Bank for the purchase of a complete set of facilities for a wire rod mill, used in the processing of steel, from Primetals Technologies USA and India, which is a joint venture of Siemens and Mitsubishi Heavy Industries. Japan’s export credit agency Nippon Export and Investment Insurance (NEXI) will cover JBIC’s portion of the deal.
The deal is part of a yen- and dollar-denominated export credit line agreement made between the two sides in March 2018, in which JBIC committed to providing ¥6.6bn and US$84mn to JSW Steel.
In a statement, JBIC says: “In India, demand for steel is expected to expand in the medium to long term, particularly in the infrastructure sector. Amid heightened interest in high-quality steel manufacturing facilities, these loans are intended to help further expand exports of machinery and equipment from Japan.”
JBIC and Mizuho Bank have co-financed loans to the Indian steel company in the past. In February 2013, they provided a loan worth US$53mn for a continuous steel annealing line and associated technologies services from JFE Shoji Trade Corporation.
Meanwhile in March last year, JSW Steel claimed to have signed “the largest trade finance facility to have been arranged in the Indian steel sector,” after inking a five-year US$700mn advance payment and supply agreement with Swiss trader Duferco International Trading Holding (DITH).