Japan Bank for International Cooperation (JBIC) has signed a facility agreement for buyer’s credit totalling up to about US$59mn with National Petrochemical Company (NPC) of Iran. The credit facility is co-financed with Deutsche Bank, Tokyo branch (agent bank) and Standard Chartered Bank, Tokyo.
This facility supports the project for the construction of a high density polyethylene production plant (annual capacity: 300,000 tons) in Bandar-Assaluyeh in the Pars Special Economic/Energy Zone on the Persian coast. The project is undertaken by Mehr Petrochemical Company (MHPC) in which Itochu, NPC, Cementhai Chemicals of Thailand, and National Petrochemical Public of Thailand have equity stakes.
This facility will finance the export of equipment and services necessary for the construction of the plant to MHPC by a consortium between Mitsui Engineering and Shipbuilding Co and Itochu.
In addition to this buyer’s credit, JBIC will provide supplier’s credit totaling up to around US$89mn for Itochu, thereby comprehensively supporting the plant export by the Japanese consortium.
This is the fourth export credit facility provided to NPC, one of the highly rated governmental enterprises in Iran relying on NPC’s credit. Along with this facility, the Multilateral Investment Guarantee Agency (Miga) of the World Bank group is expected to provide insurance for Itochu and other foreign equity holders of MHPC.
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.