TOKYO -- An Indonesian liquefied natural gas project spearheaded by trading house Mitsubishi Corp. will receive loans from private and public lenders in Japan.
Japan's three megabanks and the state-owned Japan Bank for International Cooperation will lend more than 130 billion yen ($1.11 billion) to Donggi Senoro LNG, in which Mitsubishi holds a 45% stake.
Donggi Senoro plans to open in fiscal 2015 an LNG station with an output capacity of up to 2 million tons a year, and to export an annual 1.3 million tons to Japanese utilities Kyushu Electric Power and Chubu Electric Power through the end of 2027.
Of the project's 330 billion yen total cost, slightly more than 170 billion yen will be procured through loans -- 50% from JBIC and 25% from Sumitomo Mitsui Banking Corp., Bank of Tokyo-Mitsubishi UFJ, and Mizuho Bank. The Export-Import Bank of Korea will cover the rest.
Nippon Export and Investment Insurance will provide the three megabanks with trade insurance. The coverage of up to 100% will exceed the usual 90% to 97.5%.
Japan imported 87.73 million tons of LNG in fiscal 2013, up 24% from before the March 2011 earthquake. The figure has doubled in value terms. With nuclear reactors remaining idled since the Fukushima meltdown, the country is buying more LNG to run fossil-fuel-fired plants.