JBIC SUPPORTS RAILWAY MODERNIZATION IN ROMANIA --Provides Guarantee for a Private Syndicate Loan--
1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed a guarantee agreement on March 28 for a private syndicate loan totaling 12,325 million yen or the equivalent of $100 million. The loan is co-financed by Deutsche Bank AG, Tokyo Branch (lead bank) and The Sanwa Bank, Ltd. The funds will be used for the Diesel Electric Locomotive Rehabilitation Project in Romania.
2. The purpose of the project is to update diesel engines and generators, as well as to introduce new heating equipment, in 65 diesel electric locomotives. JBIC provides a guarantee for the private syndicate loan for this project.
3. The project is expected to reduce fuel consumption and maintenance costs of the National Company for Railway Passenger Transport in Romania, and to improve the environment by reducing the volume of emissions. After rehabilitation, the locomotives will mainly operate on the railway sections linking the country's main transportation arteries and areas bordering with Hungary, Bulgaria and other surrounding countries. The project is expected to enhance the passenger transportation capacity in these areas and help offer better services.
4. The government of Romania is undertaking as a national project the reconstruction and competitive enhancement of the Company, and intends to invigorate the country's transportation industry by using the latest technology and know-how from Western countries. Whereas the capital flow from Japan to Romania has been limited to date, the guarantee facility offered by JBIC is expected to increase the inflow of the long-term financing from the Japanese private sector to this country.