India/ Insurance for Reliance Industries’ Petrochemical Expansion Project and a new program for Japanese regional banks

NEXI has decided to support a loan for exports for petrochemical complex expansion project implemented by Reliance Industries Limited, the largest private company in India. Along with this project, NEXI has also established a new insurance program that supports Japanese regional banks' financing for overseas projects.

 

The Reliance Industries' project is to raise capacity of the oil refinery and petrochemical complexes including facilities at Jamnagar, Gujarat, India. Equipment suppliers include more than 20 Japanese manufacturers.

 

For the exports of the equipment by Japanese companies, Japan Bank for International Cooperation (JBIC) and Japanese commercial banks including the Bank of Tokyo-Mitsubishi UFJ, Ltd have agreed to co-finance USD 550 million. NEXI's insurance will cover the USD 220 million loans extended by the commercial banks.

 

In addition to six Japanese commercial banks that initially signed the loan agreement, some more banks (Japanese regional banks) are expected to participate through a partial assignment of the contractual rights and obligations. Under the existing NEXI program, only the initial six commercial banks would have access to NEXI's insurance. Under the new program, however, those regional banks can use NEXI's insurance even though they do not have much experience of overseas transactions and time for consideration. In concrete terms, such a bank can use NEXI insurance if it has been in negotiation since the primary stage and obtains the rights and obligations under a loan agreement within a certain period after the signing by the other lenders (*). This new program will facilitate participation of Japanese regional banks in overseas projects, and through the cooperation with Japanese regional banks NEXI will continue to provide further support for Japanese overseas business.

 

(*) In case a loan is co-financed by JBIC under a single facility, prior approval by JBIC shall be required for an assignment of such a loan.

 

(Reference)

1. Insured

The Bank of Tokyo-Mitsubishi UFJ,Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Bank, Ltd., The Gunma Bank, Ltd., The Hachijuni Bank, Ltd., The Chiba Bank, Ltd.

 

2. Insurance provided

Borrower	Reliance Industries Limited
Insured Amount	USD 220 million
Tenor	Approx. 6 years

 

3. Exporters

Arai Pump Mfg. Co., Ltd., ASKA CORPORATION, DAIDO MACHINERY CORPORATION Dresser Japan Limited, Elliott Ebara Turbomachinery Corporation, FUJI FILTER MFG . CO., LTD., Hitachi Ltd., HONDA KIKO CO., LTD., JSR Corporation, JSR Trading Co., Ltd., Kanematsu Trading Corporation, KEISOKKI KOGYO CO., LTD, Kubota Corporation, Marubeni Techno Systems Corp, Rigaku Corporation, Shimadzu Mectem Inc, Tanaka Scientific Limited, TEIKOKU ELECTRIC MFG. CO., LTD., TMT MACHINERY, INC. etc.