JBIC PROVIDES CREDIT TO UZBEKISTAN - Bank-to-Bank Loan to NBU -
1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed today a loan agreement totaling some 7.5 billion yen with the National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU) to upgrade a cotton mill. This loan is cofinanced with The Fuji Bank, Ltd. and The Sumitomo Trust & Banking, Co., Ltd. with JBIC covering about 4.5 billion yen, or 60% of the total.
2. The proceeds of this loan will be used, via NBU, to the purchase of equipment and services from Marubeni Corp., a Japanese trading company, which are necessary for the company in Uzbekistan, Kabool-Fergna Co., Ltd., a joint venture with a Korean company, to repair and upgrade a cotton mill in the City of Fergna, located 300 km east of the capital Tashkent in the eastern region of Uzbekistan. (The Japanese manufacturers are Toyoda Automatic Loom Works, Ltd., and Murata Machinery, Ltd. etc.)
3.Uzbekistan is the fifth largest producer of cotton in the world. Although the country is also endowed with abundant natural resources, including petroleum, natural gas and ores, Uzbekistan was designated as the key center of cotton production under the industrial policy of the former Soviet Union. As a result, its industrial structure dominantly consists of agriculture and agriculture-related industries, and diversification of this industrial structure is a pressing need to achieve economic growth. At the moment, particular emphasis is being put on processing domestically produced raw cotton into value-added products for export.
4. The Project will help Japanese firms to expand exports of equipment for cotton spinning. It will also support the government of Uzbekistan in its efforts to boost the production of value-added products in the textile sector, by upgrading the aged cotton mill facilities to increase capacity. Further, the Project is expected to increase exports to neighboring countries, thus obtaining more foreign currency for Uzbekistan.