JBIC, Pemex sign US$500mn loan deal

The Japan Bank for International Cooperation (JBIC) has signed an untied loan agreement with Mexican state oil company Pemex totaling the equivalent of US$500mn in yens, JBIC and Pemex said in separate statements. Pemex's director Raúl Muñoz Leos and JBIC governor Kyosuke Shinozawa signed the agreement on Wednesday. The loan is for 13 years with a three-year grace period, a JBIC official told BNamericas. The loan is co-financed with private financial institutions, and Mizuho Corporate Bank is managing the credit. JBIC also provided a guarantee for the portion covered by the private institutions. "This untied loan offers great benefits to Pemex, because it allows financing, long term and at a preferential interest rate, for up to 100% of some projects," Pemex said in its statement. The loan will finance five natural gas projects in Crudo Ligero Marino, Ixtal-Manik, Macuspana, Costero Terrestre and San Manuel under Pemex's strategic program to develop multiple gas and oil fields along the Gulf of Mexico, JBIC said. Mexico's domestic demand for natural gas is projected to grow at an average rate of more than 7% annually through 2011. "This loan will aid in the development of Mexico's gas fields, and by way of an increased and stable supply of natural gas, will serve to further the country's economic development," the JBIC statement said. Japanese firms participating in natural gas-fired power projects in Mexico will also benefit from the supply of gas from these plants, it said. As the Mexican government plans to construct more natural gas-fired power plants to meet growing power demand, the loan will lead to greater business opportunities for Japanese firms participating in such projects as investors or exporters of equipment, the bank added. The loan will also contribute to improving the business infrastructure for more than 250 Japanese affiliates operating in Mexico, it said.