Japan signs first $2.2 billion loan under $550 billion US investment pledge
Japanese and U.S. flags fly side by side in front of the White House in Washington, U.S., April 5, 2024. REUTERS/Kevin Lamarque
TOKYO, May 1 : Japan has signed a $2.2 billion loan agreement for the first batch of projects under its $550 billion U.S. investment pledge, kicking off financing tied to a trade deal that cut U.S. tariffs on Japanese imports to 15 per cent.
State-owned Japan Bank for International Cooperation said on Friday it would provide about a third of the $2.2 billion financing, with the rest provided by commercial banks.
Sources familiar with the matter said the commercial bank portion will be provided by Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group, and will be guaranteed by state-owned Nippon Export and Investment Insurance (NEXI).
The first three projects, with a combined value of $36 billion, include an oil export facility in Texas, an industrial diamond plant in Georgia, and a natural gas-fired power plant in Ohio.
Under the arrangement with the U.S., available free cash flows from investments will be split evenly between the two countries until a specific allocation is reached, after which 90 per cent will go to the U.S.
