Japan to ease yen loan terms, speed up process
To win more orders for infrastructure projects in emerging nations, the Japanese government will drastically review its yen loan conditions, such as by cutting the processing time in half and no longer setting guarantees as an essential condition for such
Prime Minister Shinzo Abe will announce the decision tomorrow at a meeting to be held on the side-lines of an Association of Southeast Asian Nations meeting scheduled to be held in Malaysia, according to sources.
Abe also plans to announce US$110 billion (Bt4 trillion) in financial aid for infrastructure improvement projects in Asia over a five-year period, and that Japan will reform its yen loan policy to respond more appropriately to needs in Asia, the sources said.
The government is positioning the plans as "the first major reform since yen loans started in 1958", according to an official involved.
Japan recently lost a bidding war with China over a contract to build a high-speed railway in Indonesia, which prompted the government to decide to ease yen loan conditions in the hope of winning more overseas contracts for large-scale infrastructure projects, sources said.
Japan currently asks borrowing governments to cover any losses if yen loans are provided to bodies other than the government, but this 100-per-cent government guarantee will no longer be required.
Japan will also stop requiring loan guarantees from borrowing governments for important projects conducted by state-owned companies and local governments.
