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  5. METI Minister Seko Attends a Signing Ceremony of Memorandum of Cooperation between Nippon Export and Investment Insurance (NEXI) and a Group of Japanese and Foreign International Banks to Encourage Mobilizing the capital of Institutional Investors for Infrastructure Exports

METI Minister Seko Attends a Signing Ceremony of Memorandum of Cooperation between Nippon Export and Investment Insurance (NEXI) and a Group of Japanese and Foreign International Banks to Encourage Mobilizing the capital of Institutional Investors for Infrastructure Exports

Effort for establishing a new scheme taking advantage of trade insurance to fill in infrastructure financing gaps

June 7, 2019

On June 7, 2019, witnessed by Mr. Hiroshige Seko, Minister of Economy, Trade and Industry, Nippon Export and Investment Insurance (NEXI) and a group of 13 international banks of seven countries, including Japan, concluded a memorandum of cooperation (MOC) aiming at establishment of a framework in which the capital of institutional investors are mobilized for exports of quality infrastructure technology.

Background and purpose

In developing countries and regions with dramatic growth, there is a significant demand for infrastructure development. Meanwhile, shortfalls can be seen in financial input for infrastructure development since investors consider high country risk when investing in developing countries. To address such a gap between high demand and low investment, further expansion of efforts for mobilizing more private finance, including the capital of institutional investors with considerable funds, into the infrastructures of developing countries is necessary, as is an increase in the supply of public financial resources to such infrastructure development.

The Export Strategy for Infrastructure Systems (FY2019 revised version), formulated on June 3, 2019, and determined by the Management Council for Infrastructure Strategy, sets a new important policy as goals for addressing worldwide infrastructure financing gaps and further making use of the capital of institutional investors for exports of quality infrastructure: NEXI’s inauguration of a trade insurance system targeted for both infrastructure funds and project bonds*, establishing a new scheme designed for institutional investors as an initiative in collaboration with international banks.
*Note: Project bonds refer to bonds that project companies engaging in infrastructure projects issue targeting investors in order to raise funds for construction expenditures, etc.

In light of this, on June 7, 2019, witnessed by Minister Seko, NEXI and a group of Japanese and foreign international banks concluded an MOC for infrastructure funds and project bonds. The two sides will hold discussions aiming to achieve a new scheme by the end of 2019.

Reference: Participating private financial institutes

Sumitomo Mitsui Banking Corporation; MUFG Bank, Ltd.; Mizuho Bank, Ltd.; Standard Chartered Bank, the U.K.; Hongkong and Shanghai Banking Corporation Limited (HSBC), the U.K.; Citibank, the U.S.; Goldman Sachs, the U.S.; BNP PARIBAS, France; Credit Agricole Corporate and Investment Bank, France; Societe Generale S.A., France; Deutsche Bank AG, Germany; ING, the Netherlands; and Australia and New Zealand Banking Group Limited., Australia.

Division in Charge

Trade Finance Division, Trade and Economic Cooperation Bureau