The state-owned Japan Bank for International Cooperation (JBIC) and private sector financial institutions have agreed to provide a loan of 130 billion yen ($899 million) to Japan’s LNG trading giant and power generation firm, Jera, to help the latter fund LNG purchases.
JBIC said in a statement on Thursday it had signed the loan agreement with Jera. This loan would be co-financed with private financial institutions, it said.
According to the bank, the loan would provide the necessary funds for Jera to import LNG as prices continue to rise and to ensure a stable supply of electricity in Japan.
“As Japan’s public financial institution, JBIC will continue to actively support efforts by companies to secure a stable supply of important resources and contribute to Japan’s energy security,” it said.
Japan is looking to ensure winter LNG supply after the domestic electricity price soared last winter and the country experienced power shortages due to tight supply and demand, following severe cold weather and low LNG inventories.
Japan, the world’s largest LNG importer this year, mostly receives LNG under long-term contracts from countries such as Australia, Malaysia, Qatar, and the US, but also from the spot market.
LNG prices surged this year and Japan paid about $6.08 billion for its LNG imports in August.
Japan took about 49.95 million tonnes of LNG in the January-August period.