Japan is providing financial support to shore up slumping vessel exports amid flagging demand from ship owners.
The government-affiliated Japan Bank for International Cooperation signed a general agreement for arranging an export credit line for ships, worth up to $113 million, with Turkiye Is Bankasi.
JBIC said that the credit line will finance the export of ships built at Japanese shipyards to Turkish buyers at a time when the credit squeeze in the aftermath of the global financial crisis that erupted in the autumn of last year has made it difficult to structure ship financing across the world. It is JBIC's first credit line exclusively for the export of ships, the bank said.
An export credit line is a form of export credit in which JBIC makes a commitment of a certain amount of money as a loan to a foreign bank or other entities to finance exports of machinery, equipment and services from Japan.
Isbank is the largest private commercial bank in Turkey. JBIC, headed by Hiroshi Watanabe, a former vice finance minister for international affairs, is one of the world's largest international financial institutions.
"After overcoming the economic crisis in 2000-01, Turkey has continued to register solid growth performance, and the country is today drawing international attention as one of the countries with promising growth," JBIC said in a statement.
"Given the country's robust growth, the facilitation of financing through this credit line will lead to supporting Japanese firms' exports to Turkey in the coming years, thereby making a contribution to the maintenance and improvement of the international competitiveness of Japanese shipbuilders," JBIC said. "It is also expected to positively affect employment at Japanese shipyards, shipbuilding-affiliated industries, and other regional economies."
According to figures released on Nov.17 by the Japan Ship Exporters' Association, Japanese shipbuilders received orders for 91 export ships during the January-October period of this year. The 91 ships total 4,835,920 gross tons, down a whopping 74 percent from the same 10-month period of last year.
"JBIC will continue to actively support the export of ships from Japan through co-financing with private financial institutions, while drawing on its network of clients such as regional banks in developing countries," JBIC said.
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