Chubu may receive $1.3bn JBIC loan

The Japan Bank for International Cooperation (JBIC) is expected to extend an emergency loan of about $1.3bn to Chubu Electric, which faces increased costs after the utility shut down its Hamaoka nuclear power plant in May.

When Hamaoka was shut down at the request of the government, Chubu Electric increased generation at its thermal power plants to make up for the energy loss. This resulted in a sharp increase in costs for liquefied natural gas used at the thermal plants.

JBIC mainly provides loans to Japanese companies making investments abroad. Providing a loan to Chubu Electric falls outside this sphere, but the bank decided to extend the loan to stabilise Japan’s energy supply.

Under JBIC rules, the bank should not provide loans to companies to increase their operating capital. The bank, therefore, will provide the loan to Chubu Electric in a category involving fuel imports from abroad, a source at JBIC said.

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