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The Japan Bank for International Cooperation (JBIC) has signed a guarantee agreement with a syndicate of private financial institutions, consisting of Sumitomo Mitsui Banking Corporation (SMBC) as the lead bank, Societe Generale Tokyo, Mizuho Corporate Bank, UFJ Bank, BNP Paribas Tokyo, Sumitomo Life Insurance, Shinsei Bank, Sumitomo Trust and Banking and Nippon Life Insurance. It provides guarantee coverage for a syndicate loan totalling up to around Y28.6bn (about US$259mn) extended to the government of the state of So Paulo to finance the Subway Line 4 Project.
So Paulo, Brazil’s financial centre, is plagued by problems such as chronic traffic congestion and air pollution. This project aims to relieve such problems by connecting the seven existing rail and subway lines as well as the bus routes, thus improving the segmented and inefficient public transport network.  Part of this project is being financed by the private sector, which will help strengthen the fiscal position of the state government and create business opportunities for Japanese firms.
The growing stability of the Brazilian economy has led Japanese private financial institutions to show a strong interest in maintaining or expanding their operations in Brazil. In addition, recourse to the guarantee facility of JBIC will enable Japanese private financial institutions to provide long-term financing for projects undertaken in Brazil, with JBIC assuming the country risk.