Ad Hoc Expert Group Meeting

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Supporting Long-Term Financing Mechanism -JBIC's
Experience-
Ad Hoc Expert Group Meeting Rethinking the Role
of National Development Banks United
Nations New York, December 1, 2005 Toru
Tokuhisa Resident Executive Director for the
Americas
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Contents

1. Introduction of JBIC
2. JBICs Experience with NDBs
3. Lessons Learned

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1. Introduction of JBIC
1.Introduction of JBIC (1) JBICs Functions

• Japan Bank for International Cooperation (JBIC)
  is the sole Japanese governmental financial
  institution to promote Japans economic
  interchange with foreign countries.

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1. Introduction of JBIC
(2) Commitments by Financial Facilities (FY2004)
Export Loans 6.0(998mil.)
ODA Loans 41.6(6,945mil.)
Import Loans 3.0(509mil.)
Total Amount US16,686 Million
Overseas Investment Loans 37.4(6,233mil.)
Untied Loans 0.6(103mi.)
Guarantees 11.3(1,878mil.)
Equity 0.1(20mil.)
(\115.00/US)
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1. Introduction of JBIC
(3) Outstanding by Financial Facilities (as of
March.31,2005)
Export Loans 6.7(12.2bil.)
ODA Loans 54.2(98.6bil.)
Import Loans 3.7(6.7bil.)
Overseas Investment Loans 17.1(30.1bil.)
Total Amount US181.7 Billion
Untied Loans 12.6(22.9bil.)
Guarantees 4.3(7.6bil.)
(\115.00/US)
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2. JBICs Experience with NDBs
2.JBICs Experience with NDBs (1) Overview

• Some of JBICs finance for emerging/developing
  countries have been extended through governmental
  financial institutions such as national
  development banks as well as private financial
  institutions when relevant (effective
  intermediary and Two-Step Loans).
• As JBIC itself is a bank, it has been
  reasonable and convenient to have a counterpart
  familiar with financial transactions in a
  recipient country (using the common language).
• Different types of JBICs facilities have been
  mobilized to support long-term financing in
  emerging/developing countries (ODA Loans, Export
  Loans, Investment Loans, Untied Loans)

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2. JBICs Experience with NDBs
(2) Past Results

• ODA LoansAvailable Data 1987 2005 14
  Countries, 21 Institutions, 63 Cases Amount of
  Commitments 5.3 Billion (\115/)
• International Financial OperationsAvailable
  Data 1993 2005 17 Countries, 29
  Institutions, 61 Cases Amount of Commitments
  10.1 Billion (\115/) Plus 3 Regional
  Development Banks 6 Cases, Amounting
  387 Million (\115/)

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2. JBICs Experience with NDBs
(3) Major Recipients-1

• Major Borrowers/Implementation Institutions
• ODA Loans China The Export-Import Bank of
  China The Philippines The Development Bank
  of the Philippines The Land Bank of the
  Philippines Indonesia Bank Indonesia
  Vietnam State Bank of Vietnam Thailand
  IFCT-Industrial Finance Corporation of Thailand
  Bank for Agriculture and Agricultural
  Co-operatives Small Industry Finance
  Corporation Krung Thai Bank

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2. JBICs Experience with NDBs
(3) Major Recipients-2

• Major Borrowers/Implementation Institutions
• ODA Loans (Continued) Malaysia Development
  Bank of Malaysia (former Infrastructure
• Development Bank) Industrial
  Bank of Malaysia Malaysian Industrial
  Development Finance Bank Malaysian
  Agriculture Bank Bangladesh Grameen Bank
  India ICICI Bank Small Industries
  Development Bank of India Sri Lanka
  National Development Bank Central Bank of
  Sri Lanka

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2. JBICs Experience with NDBs
(3) Major Recipients-3

• Major Borrowers/Implementation Institutions
• Export Loans, Investment Loans and Untied Loans
  China The China Development Bank Korea
  The Export-Import Bank of Korea Industrial
  Bank of Korea The Korea Development Bank
  The Philippines Development Bank of the
  Philippines Thailand Export-Import Bank of
  Thailand IFCT-Industrial Finance Corporation
  of Thailand Malaysia The Industrial and
  Technological Bank of Malaysia Development
  Bank of Malaysia(former Infrastructure
• Development Bank)

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2. JBICs Experience with NDBs
(3) Major Recipients-4

• Major Borrowers/Implementation Institutions
• Export Loans, Investment Loans and Untied Loans
  (Continued) India Industrial Development
  Bank of India State Bank of India ICICI
  Bank Kazakhstan The Kazakhstan
  Development Bank Turkey The Export Credit
  Bank of Turkey South Africa Development
  Bank of Southern Africa Industrial
  Development Corporation of South Africa Mexico
  Banco Nacional de Comercio Exterior
  (BANCOMEXT) Nacional Financiera (NAFIN)
  Banco Nacional de Obras y Servicios Publicos
  (BANOBRAS)

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2. JBICs Experience with NDBs
(3) Major Recipients-5

• Major Borrowers/Implementation Institutions
• Export Loans, Investment Loans and Untied Loans
  (Continued) Colombia Instituto de Fomento
  Industrial Banco de Comercio Exterior de
  Colombia Brazil Banco Nacional de
  Desenvolvimento Economico e Social(BNDES)
  Argentina Banco de la Nacion Argentina
  Peru Corporacion Financiera de Desarrollo
  
• Regional Development Banks BCIE (Banco
  Centroamericano de Integracion Economica)
  BLADEX (Banco Latino Americano de Exportaciones)
  CAF (Corporacion Andina de Fomento)

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2. JBICs Experience with NDBs
(4) Major Purposes of JBICs Loans

• ODA Loans Industrial Development Agricultural
  Development Rural Development Development of
  SMEs Environmental Protection
• International Financial Operations (Export,
  Investment, Untied Loans) Import of Capital
  Goods and Services from Japan Financing FDIs
  from Japan Industrial Modernization
  Financing for Export-Oriented Industries
  Financing for Capital Investments of Private
  Manufacturers Development of SMEs
  Infrastructure Development

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2. JBICs Experience with NDBs
(5) Case Studies-1

• Plantation Reform Project in Sri Lanka
• Purpose providing long-term loans via
  financial institutions to
• privatized regional
  plantation companies(PRCs) to
• improve their
  productivity and management
• Amount \4,076 mil.(?35 mil.)
• Type ODA Loan (Two-Step Loan)
  Borrower The government of Sri Lanka?Central
  Bank?Participating
• Financial
  Institutions?PRCs
• Co-finance with Asian Development Bank

Sri Lankan Government (Central Bank)
Participating Financial Institutions
End Users (Privatized RPCs)
Donors (JBIC/ADB)
\/
Rs.
Rs.
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2. JBICs Experience with NDBs
(5) Case Studies-2

• Rural Development Credit Project in Bangladesh
• Purpose to assist the landless rural
  farmers providing unsecured
• credits for production
  capital such as wells, machinery, etc.
• and to bolster the
  financial structure of a micro-credit bank
• (Grameen Bank)
• Amount \2,986 mil.(?30 mil.)
• Type ODA Loan (Two-Step Loan)
  Borrower The government of Bangladesh?Grameen
  Bank?Rural
• Farmers

Rural Farmers
Bangladeshi Government
Grameen Bank
JBIC
\
Taka
Taka
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2. JBICs Experience with NDBs
(5) Case Studies-3

• Infrastructure Development Loan in Malaysia
• Purpose to support financing for
  public/private infrastructure projects
• in logistics and ICT
  fields in Malaysia
• Amount \35.4 bil.(?308 mil.)
• Type Untied Loan (Two-Step Loan)
  Borrower Development Bank of Malaysia(BPMB-former
  Infrastructure
• Development
  Bank)?Public/Private institutions engaged in
• infrastructure projects
  in logistics and ICT fields Co-finance with
  Japanese commercial banks

JBIC Commercial Banks
BPMB
End Users
\
M
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2. JBICs Experience with NDBs
(5) Case Studies-4

• Investment Loan in Mexico
• Purpose to support long-term financing
  for Japanese FDI companies
• in Mexico
• Amount 60 mil.
• Type Investment Loan (Two-Step
  Loan) Borrower Banco Nacional de Comercio
  Exterior(BANCOMEXT)
• ?Mexican private
  companies with Japanese FDI Co-finance with
  Japanese commercial banks

JBIC Commercial Banks
BANCOMEXT
End Users


FDI
Japanese Company
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3. Lessons Learned
3.Lessons Learned

• Past experience shows such importance of dealing
  with NDBs and other local financial institutions
  as
• facilitation and increase of long-term
  financing,
• utilization of expertise as financial
  institutions ,
• capturing wide range of
  participants(customers),
• mitigating the credit risks of
  end-users,
• capacity-building of such financial
  institutions, etc.
• But, there are issues to be addressed such
  as

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3. Lessons Learned

• Issues to be addressed
• Enhancement of credit-worthiness of such
  financial institutions to increase the number of
  eligible institutions?capacity-building for
  credit analysis and preparation of data
• base of credit risks
• Increase of capacity of such financial
  institutions to deal with internationally-accepted
  financing practices?capacity-building seminars
  and trainings
• Enhancement of capacity of such financial
  institutions to analyze environmental and social
  impacts of projects to be financed?Category FI
  of JBICs Environmental Guidelines
• Development of local financial and capital
  markets to mobilize local savings and increase
  foreign investments?improvement of legal
  framework, liberalization of banking
  industries, development of institutional
  investors and rating agencies, etc.

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Thank you for your kind attention.
JAPAN BANK FOR INTERNATIONAL COOPERATION
t-tokuhisa_at_jbic.go.jp http//www.jbic.go.jp/englis
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