TOKYO -- Japan will offer generous loan terms to more businesses with an eye toward its 2020 target of 30 trillion yen ($272 billion yen) in infrastructure exports -- three times the levels of 2010.
The tally reached 21 trillion yen in 2016, according to the Cabinet Secretariat. Intensifying competition from Europe, the U.S., China and South Korea has slowed growth in orders from Japanese companies since 2014.
Japan currently provides yen-denominated loans, with interest rates as low as 0.1% if the money is used for projects in low- and middle-income countries, only to foreign enterprises more than 50%-owned by Japanese companies. A new government infrastructure strategy policy hammered out on Thursday expands this to businesses where Japanese companies have stakes as low as 20%.
The change likely will give Japanese enterprises a better shot at exporting to places like Africa, where Indian companies historically have a major presence in the infrastructure market. Japanese corporations working with Indian partners could tap aid from the government here while taking advantage of the partners' strength.
The loan program will also be broadened to Japanese suppliers of components for assembly by foreign vendors.
The cabinet is expected to issue a statement on infrastructure export strategy this month that will say government support is necessary even when Japanese companies secure infrastructure orders by working with partners from abroad.
Japan has been working to strengthen public-private partnerships with China, the U.S. and India. With China, it has created a joint committee for high-level economic talks. Meanwhile, Japan and the U.S. are collaborating to boost infrastructure exports to Asia, especially in the infrastructure needed to export American shale gas to the region.
The Ministry of Economy, Trade and Industry here will also fund feasibility studies on infrastructure projects abroad. Tokyo Electric Power Co. Holdings will study rapid charging stations for electric vehicles in Saudi Arabia starting this summer. And in India, NEC will study prepaid smart cards for transit systems, like East Japan Railway's Suica.