Japan Inks $57 Million Ship Export Loan

The government-affiliated Japan Bank for International Cooperation signed a loan agreement worth about $57 million to support Japanese vessel exports to a South Korean shipping firm. JBIC signed the loan agreement with the Korea Development Bank, affiliated with the South Korean government. The loan was co-financed with Sumitomo Mitsui Banking, one of Japan's three biggest commercial banks.
According to JBIC, the loan will be provided through KDB to SK Shipping, a leading shipping company in South Korea, for its purchase of two 55,800 deadweight ton bulk carriers built at Japanese shipyards.
JBIC did not identify the Japanese shipyards.
SK Shipping will purchase the two bulk carriers through its Panamanian subsidiary from major Japanese trading house Sumitomo, said JBIC.
JBIC said in a statement on Tuesday, "As the credit squeeze in the aftermath of the global financial crisis since autumn 2008 has made it difficult to structure ship financing across the world, this loan, which provides financing through KDB, will lead to supporting exports by Japanese firms and thereby contribute to maintaining and improving the international competitiveness of Japanese shipbuilders."
"JBIC will continue to actively support the export of ships built at domestic shipyards, which are playing a major role in the regional economies, especially in employment, by utilizing its network of clients such as government or private financial institutions in the importers' countries," JBIC said.
The loan is the second ship export loan provided by JBIC. Japan, the world's second-largest economy and one of the world's top shipbuilding nations along with South Korea and China, started providing financial support through JBIC recently to shore up slumping vessel exports amid flagging demand from ship owners.
In the first 11 months of fiscal 2009, which started in April, Japanese export ship orders plummeted 61.4 percent from a year earlier to 5,412,570 gross tons, according to figures released by the Japan Ship Exporters' Association earlier this month.
Last December, JBIC signed a general agreement for arranging an export credit line for ships, worth up to $111 million, with Turkiye Is Bankasi, the largest private commercial bank in Turkey.
The credit line is designed to finance the export of ships built at Japanese shipyards to Turkish buyers.