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Economy

Japan to put 33bn yen into infrastructure account

TOKYO -- Japan's Ministry of Finance will inject 33 billion yen ($272 million) into the Japan Bank for International Cooperation in order to serve as capital for a new Asia-focused infrastructure investment account.

     The new infrastructure account is in response to the growing influence of the China-led Asian Infrastructure Investment Bank and is in line with the Japanese government's goal of encouraging investment in high-quality infrastructure.

     The account will be included in the ministry's fiscal investment and loan program for next fiscal year. Because the account will provide funding to such high-risk undertakings as infrastructure projects being carried out by local governments in developing countries, it was determined that a solid capital base was necessary.

     The government-affiliated JBIC will also provide its resources to create about 150 billion yen in capital for the account, which will be used to support fundraising and spur infrastructure development.

     The current law governing the JBIC requires that lending be recovered for each individual project that is financed, which disqualifies high-risk, high-return plans. Consequently, a bill will be submitted to next year's session of the Diet that will require that only the overall account be in the black, enabling investment in high-risk projects. The bill would also ease borrowing conditions for loans from local financial institutions to mitigate the risk from changing exchange rates.

(Nikkei)

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