JBIC loan to Sri Lanka power

Supporting Japanese Machinery and Equipment Export for Power Infrastructure Project in Sri Lanka First Buyer's Credit to Sri Lanka in 21 Years (February 15, 2008) - 1. Japan Bank for International Cooperation (JBIC; Governor: Koji Tanami) signed today a buyer's credit agreement totaling up to approximately 1.2 billion yen with the Government of the Democratic Socialist Republic of Sri Lanka. This loan was provided in cofinancing with Citibank Japan Ltd. 2. The proceeds of this loan are to be used by the Ceylon Electricity Board (CEB) of Sri Lanka to purchase power generators, turbines and other machinery and equipment (manufactured by Mitsubishi Electric Corporation and Mitsubishi Heavy Industries, Ltd.) from Mitsubishi Corporation, as it undertakes rehabilitation of the old Ukuwela Power Station (19MW x 2) in the central province of Sri Lanka.

3. Sri Lanka has seen a sharp increase in its power demand in recent years spurred by a robust 6.3% economic growth on average in recent years from 2003 to 2006. Thus securing a stable power supply is high on the agenda of its power sector. Meanwhile, the Ukuwela Hydro Power Station, a stable supply source of electricity since it was built in 1976, has become decrepit, resulting in a fall in operational efficiency. The power station is thus facing an increasing risk of breakdown and suspension of operations. Under these circumstances, this loan is aimed at not only supporting the power sector in Sri Lanka, but also maintaining and improving the international competitiveness of the Japanese industry in trade transactions. This loan is the first buyer's credit that JBIC has provided to Sri Lanka in 21 years.

4. JBIC will remain committed to provide financial support to the Japanese companies' exports to the developing countries, while complementing private-sector financing.