Argentine Republic / Loan Insurance for Purchase of ATS System
by Administración de Infraestructuras Ferroviarias
Nippon Export and Investment Insurance
～First sovereign loan insurance to Argentina after recommencing cover for Argentine projects～
Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Kazuhiko Bando) has decided to provide insurance for a loan extended to ADIF*1 under the Ministry of Transport of Argentine Republic (hereafter Argentina), to purchase ATS*2 system manufactured by Nippon Signal Co., Ltd. (hereafter Nippon Signal) and delivered through Marubeni Corporation (hereafter Marubeni).
This transaction is co-financed by Deutsche Bank AG, Tokyo Branch (hereafter Deutsche Bank) and the Japan Bank for International Cooperation (JBIC) through a loan provided to the Ministry of Finance of Argentina, and NEXI will undertake insurance for the loan portion provided by Deutsche Bank.
In January, 2002, NEXI completely suspended insurance for Argentine mid-to-long term projects. Since that time, NEXI gradually eased the terms of suspension in phases, and in March, 2016, in consideration of the resolution brought to the holdout creditors’ issue and Argentina’s return to the international financial market, NEXI made the decision to recommence underwriting for public sectors on their mid-to-long term projects. Underwriting for the said loan marks NEXI’s first mid-to-long term sovereign transaction with Argentina after deciding on resumption.
In Argentina, a large-scale infrastructure investment plan has been formulated as part of the economic reform program. Under this plan, Marubeni will deliver ATS system made by Nippon Signal to ADIF, which will be installed on all metropolitan railway lines (8 in total) operating in the outskirts of the capital city of Buenos Aires. On February 22, 2012, a severe train accident occurred at Once Station on the Sarmiento Line in Buenos Aires, and in view of taking measures against such crash accidents caused by break operation errors or overspeed, the Argentine government had an urgent need to have ATS system installed on the whole metropolitan railway network.
On November 21, 2016, Prime Minister Abe paid an official visit to Argentina which was the first visit of Japan’s prime minister to the country in the last 57 years. The two countries issued the Japan-Argentina Joint Statement, where President Macri welcomed the measures taken by the Japanese side such as the full resumption of insurance by NEXI for Argentine transactions, including sovereign ones, and indicated high expectations for NEXI's future support.
19 years since the last visit of Argentina’s President to Japan, President Macri arrived at Tokyo to hold the Japan-Argentina Summit Meeting with Prime Minister Abe. Parallel to the Summit Meeting held on May 19, a three-party agreement pertaining to the project was signed and exchanged among the Ministry of Finance of Argentina, Deutsche Bank, and NEXI.
(Luiz Caputo, Minister, Ministry of Finance of Argentina (Left), Tatsuya Terazawa, Director General, Trade and Economic Cooperation Bureau, Ministry of Economy Trade and Industry (Centre), Kazuhiko Bando, Chairman and CEO, NEXI (Right))
NEXI will also be providing cover on an export contract between Marubeni and ADIF.
As Japan’s official export credit agency, NEXI will continue to actively support the business development of Japanese companies overseas.
| Insured | Deutsche Bank AG, Tokyo Branch |
| Covered risks | Political Risks 100%, Commercial Risks 95% (with Sovereign Special Clause) |
Contact
Infrastructure Group, Structured and Trade Finance Insurance Department, NEXI
Tel: +81-3-3512-7674
*1. Administración de Infraestructuras Ferroviarias Sociedad del Estado
*2. Automatic Train Stop