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1.Loan
| Amount | Up to 70% of total project cost (80% if deemed particularly necessary. Necessity is considered on a case-by-case basis depending on the characteristics of each project, etc.). |
| Tenor | Up to 20 years with grace period up to 5-year in principle (Maximum: 25 years with 10-year grace period) |
| Interest Rate | JICA's funding cost plus margin including credit risk premium of the borrower. Interest rate as well as tenor will be set in consistence with requirements of Official Development Assistance. |
| Currency | JPY, USD, EUR and some local currencies including IDR, THB and PHP are also available through cross-currency swap operation. |
| Security | Standard and customary security package including financial covenants |
| Scheme | Project finance, Corporate loan, Bank loan (including Sustainability linked loan) |
2.Credit Guarantees
| Scheme | Portfolio guarantee which provides partial credit guarantees for loan portfolios—primarily new portfolios—extended by local banks and financial institutions (including regional development finance institutions) to local small and medium-sized enterprises (SMEs), etc. in developing regions. |
| Guarantee Coverage | Up to 50% of the total project cost. In the case of co-guarantees, the combined coverage with co-guarantors shall not exceed 50%. |
3.Bond subscription
| Amount | In principle, up to 70% of planned bond issuance amount |
| Yield | Set JICA’s acquisition terms (such as yield) at levels considered reasonable in market transactions |
| Currency | Same as Loans. |
| Scheme | In principle, ESG labeled bonds |
4.Equity Investment
4-1. Private Equity
Method of investment: Direct investment in local companies in principle. Maximum amount is 25% of total capital (PE). JICA shall be a minority investor and does not take unlimited liability. Class shares, including preferred shares, are also possible.
Investment period and exit policy: Depending on the characteristics of the project plan, exit policies are set prior to investment and agreed upon with the core investors and the investee. The investment period is stipulated in the exit policy of each individual project.
4-2. Fund Investment
In addition to direct support to businesses, PSIF can be provided through funds. The outline is as follows.
JICA may invest in funds in cases where higher development impact can be achieved by targeting multiple relatively small-scale projects. Specifically, through Fund Investment, PSIF may support small and medium-sized enterprises, BOP and other social development projects, infrastructure projects including water and renewable energy, climate change and disaster response, and efforts to reform state-owned enterprises, etc.
Fund Investments are eligible if the funds involve investments with short to medium term risks and is difficult to be established solely by private companies or ordinary financial institutions, and if PSIF can play a catalytic role in mobilizing private capital. In addition, fund investments are also eligible if PSIF is expected to help establish business practices and pave the way for private funds to take on this role in the future.
Another important factor is the potential opportunity for the utilization of Japanese technology and know-how, such as business matching with Japanese companies, including small and medium-sized enterprises.
For the time being, JICA makes investment in funds administered by partners with proven track records and expertise in fund management, and co-invests with MDBs, DFIs, other development organizations