Mitsubishi UFJ, JBIC to Lend $750 Million for Mitsui's Projects in Mexico
The Japan Bank for International Cooperation and the country’s three biggest banks signed a loan for a $1.2 billion acquisition by Mitsui & Co. and Tokyo Gas Co. of power-plant and natural-gas pipeline assets in Mexico.
State-controlled overseas lender JBIC, with the banking units of Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc., will offer $750 million to a Mexican venture formed by Mitsui and Tokyo Gas, JBIC said in a statement in Tokyo today.
The loan is part of JBIC’s plan to expand financing for overseas power, water supply, rail and other infrastructure projects invested by Japanese companies. The country’s utilities and trading houses are increasing asset purchases abroad to counter slowing sales growth at home as the population shrinks.
MT Falcon Holdings Co., the venture 70 percent owned by Mitsui, completed the $1.2 billion deal in June to buy five power plants with a combined capacity of 2,233 megawatts, and a 54-kilometer (34-mile) gas pipeline in Mexico from Barcelona- based Gas Natural SDG SA, Spain’s largest gas supplier.
Electricity generated from the five plants is sold to Mexico’s state-owned utility, Comision Federal de Electricidad, under the 25-year sales contracts, Mitsui and Tokyo Gas said last December. The loan will be repaid using income from power sales by the venture, according to the JBIC statement.
Tokyo Gas is Japan’s largest distributor of natural gas, supplying the fuel to more than 10 million customers in the capital and surrounding prefectures.
To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net.
To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net.
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