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Press Releases

NR2000-34
November 2, 2000

Overseas Economic Cooperation Operation

JBIC SIGNS PROTOCOL FOR BUYER'S CREDIT TO IRAN
- First Direct Facility in 24 Years -

  • 1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) decided to provide the first direct facilities in 24 years for export credit to finance exports of Japanese firms pertaining to 4 projects in the Islamic Republic of Iran, and signed on November 2 four protocols setting forth the basic facility terms and conditions with Vice Governor M.J. Mojarrad of the Bank Markazi Jomhouri Islami Iran who was accompanying the Iranian President Mohammad Khatami on his official visit to Japan.
  • 2. The 4 projects covered by the protocols are: The Supply of Line Equipment to the Iraninan Islamic Republic Railways, Ardakan Pellet Plant Project, 4th Aromatics Plant Project and PTA II Plant Project. The facilities will provide financial support for the export of equipment and plant facilities by Japanese firms to the individual projects. JBIC will provide 60% of the total amount of financing, while the remaining 40% will be cofinanced by financial institutions in the private sector. The following is the a brief description of the 4 projects.
    ProjectsFacility
    User
    DescriptionExporter
    (Manufacturer)
    Total
    Amount
    (billion yen)
    Share of
    JBIC
    (billion yen)
    The Supply of Line Equipment to the Iraninan Islamic Republic RailwaysBank Melli IranThe supply of Line Equipment and 66 Station Multiplex and Supervisory SystemMarubeni Corp.
    (NEC Corp.)
    0.50.3
    Ardakan Pellet Plant ProjectBank SepahConstruction of a steel pellet production plant in ArdakanKobe Steel, Ltd.
    Marubeni Corp.
    Mitsubishi Corp.
    5.73.4
    4th Aromatics Plant ProjectBank MellatConstruction of the 4th Aromatics plant in Bandar AssaluyehToyo Engineering Corp.28.116.9
    PTA II Plant ProjectBank MellatConstruction of a PTA plant in Bandar Imam KhomeiniMitsubishi Heavy Industries, Ltd.
    Tomen Corp.
    18.811.3
  • 3. Reflecting the political and economic conditions brought about by the Iranian Revolution in 1979 and the Iran-Iraq War from 1980 to 1988, business activities for exports to Iran have been at a standstill. In particular, export credit in the form of a direct facility has not been extended for the past 24 years since buyer's credit was provided to NPC for a project constructed by IJPC. However, given changes in the political and diplomatic environment ushered in by the moderate reformer President Khatami assuming the Presidency, Japanese firms have a strong desire to reinvigorate export business with Iran. Accordingly, JBIC have received a number of preliminary financing proposals to date.
  • 4. The facilities agreed to by this protocol will provide financial support for the expansion of Japanese exports in equipment and facilities, which will lead to closer trade relations between the two countries and contribute to economic development in Iran through implementing the projects to which the Iranians attach high priority.

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