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Japan to offer more loans to increase its infrastructure exports

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Japan to offer more loans to increase its infrastructure exports

Japan will offer loans to more Japanese companies to achieve its 2020 target of ¥30 trillion in infrastructure exports, the Nikkei Asian Review reported June 8.

Figures from the Cabinet Secretariat showed total orders reached ¥21 trillion in 2016 as keen competition from Europe, the U.S., China and South Korea slowed the growth in orders since 2014, said Nikkei.

For projects in low- and middle-income countries, Japan currently provides yen-denominated loans with interest rates at 0.1%. Loans are only offered to overseas enterprises that are more than 50% owned by Japanese companies.

Based on a new government infrastructure strategy policy agreed on June 7, overseas enterprises with Japanese stakes as low as 20% can now use the loans.

This will allow Japan to export its services to places such as Africa, where Indian companies have a dominant presence in the infrastructure market.

The policy will also extend to Japanese suppliers of components for assembly by foreign vendors, said Nikkei.

The Cabinet is expected to issue a statement on the new infrastructure export strategy in June.

As of June 7, US$1 was equivalent to ¥109.99.