Ministry seeking ¥1.8 trillion for Japan’s infrastructure investment in Asia

Ministry seeking ¥1.8 trillion for Japan’s infrastructure investment in Asia

The Finance Ministry is seeking an allocation of ¥1.8 trillion under the government’s investment and loan program for fiscal 2016 to help Japan beat out China for infrastructure investment projects in other parts of Asia, officials said.

The funds, up 1.5-fold from a year earlier, will be used to reinforce lending and investment capabilities of the Japan Bank for International Cooperation and the Japan International Cooperation Agency in line with the government’s “high-quality” infrastructure investment strategy. The two bodies are hoping to rival the China-led Asian Infrastructure Investment Bank, ministry officials said.

According to the officials, the ministry aims to revise the JBIC law to establish a ¥200 billion special account within the government-affiliated lending institution to allow the bank to more actively pour funds into long-term — and risky — infrastructure projects. Under the fiscal loan and investment program, ¥45 billion is being sought as the base funding resource for the envisaged account.

The ministry is also requesting ¥800 billion, up 60 percent year-on-year, to provide the JBIC with a government guarantee for the institution’s issuance of bonds to raise necessary funds. In addition, the ministry plans to increase fiscal loans to the bank by 70 percent and to the JICA by 20 percent.

The JICA will be tasked to invest in a trust fund to be set up by the Asian Development Bank and extend loans to Asian infrastructure projects jointly with the Japan-led international lending body by capitalizing on the fund, the officials added.

JIJI

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