The Export-Import Bank of Japan and nine Japanese commercial banking institutions intend to offer a total of $345.3 million in new loans to Mexico.
According to financial sources in the Japanese capital, the funds will be earmarked for a 350,000-kilowatt power generation project involving a coal-burning plant and an oil-fired facility.The money will be loaned to Nacional Financiera SNC of Mexico after an official agreement is signed with the Japanese banks next month, the sources explained.
It will be the first new lending to Mexico since Washington announced that a debt rescue program known as the "Brady Strategy" would be applied to that country.
In March, Mexico was the first country to take advantage of the rescue plan worked out by U.S. Treasury Secretary Nicholas Brady for debt- ridden nations. At that time the Japanese commercial banks agreed to reduce the principal and interest payments on Mexican debts.
However, these same banks refused to provide new loans under the program until the Ex-Im Bank agreed to associate itself with specific Mexican projects.
The Ex-Im Bank is expected to provide roughly $200 million and the other nine private banks will offer the remainder at an interest rate of only 7.3 percent per annum.
Mitsubishi Corp., Mitsubishi Heavy Industries Ltd. and Mitsubishi Electric Corp. already have received an order for construction of the power plants in the newly developed industrial area of the Lazaro Cardenas district of Southwest Mexico.
In the recent past, Japanese commercial banks have declined to provide Mexico with fresh loans due to a lack of effective measures to prevent capital outflows. Flight capital, or funds which Mexican citizens hold abroad, has been estimated as of last October at around $84 billion.
Financial sources in Tokyo noted that, with the Ex-Im Bank apparently willing to play a major role in such new loans to Mexico, other private banking institutions now may be willing to give serious consideration to putting funds into similar projects in that country.