Katsunori Kudo Resident Executive Director for the Americas

1. JBIC Finance June 15, 2005 Katsunori Kudo Resident Executive Director for the Americas Japan Bank for International Cooperation ALIDE35, Rio de Janeiro

2. Outline of JBIC P.2 Role and Function of JBIC P.12 Conclusion P.17 Clean Development Mechanism P.20 Recent JBIC Press Release on Latin America P.26 Contact Lists P.28 (Reference) Address by Prime Minister Junichiro Koizumi on the Latin America and Caribbean Policies (Extract) P.29~P.35 Table of Contents

3. Profile of JBIC Name : Japan Bank for International Cooperation (JBIC) Establishment: October 1, 1999 Purposes : Contributing to the sound development of the Japanese economy as well as international economy, under the principle that it will not compete with financial institutions in the private sector, through lending and other operations for: 1. Promotion of Japanese exports, imports or Japanese economic activities overseas 2. Stability of international financial order 3. Economic and social development

4. Operation of JBIC Principles 1. Policy-Lending Institution to Implement Japan’s External Economic Policy 2. Complementing and Encouraging Private-Sector Financial Institutions 3. Ensuring Financial Soundness International Financial Operations (IFO) Overseas Economic Cooperation Operations (OECO) • Export loans • Import loans • Overseas Investment loans • Untied loans • Equity participation • etc. • Official Development Assistance (ODA) loans • Studies Sources of Funds Sources of Funds • Borrowings from Fiscal Investment and • Loan Program (FILP) • Bond Issues • Internal Funds, etc. • Capital Contributions from the Government • Borrowings from FILP • Internal Funds, etc. The primal objective of International Financial Operations is to contribute to the promotion of Japanese exports and imports, as well as Japanese economic activities overseas, and to the stability of international financial order. The primal objective of Overseas Economic Cooperation Operations is to assist developing countries in their efforts to develop economic and social infrastructure and stabilize their economies.

5. Development Assistance Department IV Latin America and the Caribbean, Africa (excluding Egypt) and Central Asia and Caucasus Development Assistance Department III South Asia (exc. Bangladesh & Sri Lanka), Middle East, Central & Eastern Europe, Russia Development Assistance Department II East Asia, Cambodia, Laos, Viet Nam, Bangladesh and Sri Lanka Development Assistance Department I Southeast Asia (excluding Cambodia, Laos and Viet Nam) Sector Strategy Development Department Project Development Department Administration and General Services Department Treasury Department Policy Planning and Coordination Department Personal Department Audit Department Legal Department Loan Administration and Information Systems Department Development Assistance Strategy Department Development Assistance Operations Evaluation Office Accounting Office Public Relations Office Information Systems Office Organization Chart Governor Deputy Governor and Managing Directors Senior Executive Directors Executive Directors Special Advisor Secretariat Office Analysis Operation (OECO) Operation (IFO) Administration & Support International Finance Department III North America and Latin America and the Caribbean International Finance Department II Central Asia and the Caucasus, Pakistan, Afghanistan, the Middle East, Africa and Europe International Finance Department I Asia (excluding Central Asia and the Caucasus, Pakistan and Afghanistan) Overseas Representative Offices Osaka Branch JBIC Institute Project Finance Department Corporate Finance Department Energy and Natural Resources Finance Department Policy and Strategy Department for International Financial Operations Environment Analysis Department Country Economic Analysis Department Credit Analysis Department Advisory and Consulting Office for SME Industrial Research Office

6. JBIC Worldwide Network 29 Offices in the World London Paris Frankfurt Moscow Beijing Toronto New York Islamabad Tokyo Washington D.C. Hanoi Osaka Cairo Hong Kong New Delhi Manila Mexico City Bangkok Colombo Nairobi Bogota Dhaka Kuala Lumpur Jakarta Rio de Janeiro Singapore Lima Buenos Aires Sydney

7. JBIC Commitments to the Latin America (by type, average amount in each period)

8. Outstanding Balance of IFO Loans JBIC’s (IFO) Loans to the World: Total US$ 77,980 million IFO Loans to Latin America: Total US$13,464 million As of March 2005 (Exchange Rate: JPY109/US$)

9. Total ODA Loan Commitments JBIC’s ODA Commitments to the World: Total US$210,104 million JBIC’s ODA Commitments to Latin America: Total US$13,683 million As of March 2005 (Exchange Rate: JPY109/US)

10. (1) The main loans for Latin America in 2004-2005

11. (2) Existed Loans for ALIDE Members

12. (3) Candidate Loans for ALIDE Members

13. JBIC’s International Financial Operation JBIC’s International Financial Operations (IFO) is conducted according to the following Objectives. • Promote Japanese Exports and Imports • Support Japanese Direct Investment in Developing Economies • Promote Local Industries in Developing Economies • Ensure the Stability of International Financial Order

14. JBIC’s International Financial Operation Overseas Investment Loans Export Loans Loans to support Japanese direct investment in developing countries. • Loans for the export of goods and services by Japanese firms. • To be provided to Japanese exporters • (Supplier’s Credit (S/C)) • 2.To be provided to foreign importers (Buyer’s Credit (B/C)) • 3.To be provided to foreign financial institutions • (Bank Loan (B/L)) Foreign Government/ Bank etc. Loans JBIC Loans and/or Equity Investment Loans Joint Venture Foreign Financial Institutions JBIC Loans(B/L) Loans Loans and/or Equity Investment Loans (B/C) Equity Investment Loans (S/C) Loans Japanese firms Joint Venture Partner Loans Japanese Exporter Foreign Importer Export of plants, etc. Project in the recipient country Loans

15. JBIC’s International Financial Operation Untied Loans Guarantee to Private Syndicated Loan Lending facility that aims at creating an external environment conductive to Japan’s global economic activities, including trade and investment, and supporting structural adjustment in developing countries etc. (not conditional on the procurement of equipment or machinery from Japan.) Guarantees provided to loans extended by commercial banks, etc. and to sovereign bonds and bonds issued by public entities. Investors Guarantees JBIC Exporter Issues of Public Bonds etc. JBIC Foreign Government etc. Loans Imports of equipment, technology Foreign Government/ Bank/Firm etc. Foreign Importer Loans Loans Private Financial Institutions Guarantees Investment Project in the recipient country Note: No compete to the Export Loans

16. JBIC’s Overseas Economic Cooperation Operation The principal purpose is to assist developingcountries in their efforts to develop economic andsocial infrastructure and stabilize their economies. ODA* Loans: Low-interest and long-term loans to assist developing countries in their self-help efforts toward sustainable economic development, by financing the building of their economic and social infrastructure (“Basic Strategy of Japan’s ODA Loan”: See P.16） Studies: Studies required to implement the above operations *ODA: Official Development Assistance

17. Basic Strategy of Japan’s ODA Loan Latin American Region In the Latin American region, destruction of valuable ecosystems in Amazon and other areas, and air pollution and water contamination in cities have become increasingly serious problems. We will thus give high priority to①assistance for environmental protection projects. In this region, wide economic and income disparities exist among regions inside individual countries. We will therefore place high priority on ②assistance relating tothe construction of economic and social infrastructure to rectify such gaps, ③human resource development, restoration of employment and safety, and ④poverty reduction. Furthermore, promotion of regional integration is believed to be the key to future development of an economic society in this region. For this reason, we will place high priority on ⑤assistance to regional integration initiatives. When providing such assistance, we will assign importance to coordination of efforts with international organizations, bilateral aid organizations and other stakeholders in view of the specific needs and actual conditions of each country as well as the trends towards regional integration. In addition, we will energetically take on intellectual cooperation and technical assistance. Source : Medium – Term Strategy for Overseas Economic Cooperation Operations (April 1, 2005 – March 31, 2008) April, 2005 Japan Bank for International Cooperation (JBIC)

18. How JBIC is working with the Latin American governments to promote Japanese investments in the region and what types of projects you are considering in accordance with Japanese government policy? Next page you are able to find out my simple answer. Latin America and JBIC

19. JBIC Support DFI Support Major Areas for Establishment of Complementary Relationship between Latin America and JBIC Natural Resources & Food Latin America Infrastructure CDM Projects Japan Manufacturing Industry/SME Strengthen Economic Ties between Latin America and Japan DFI : Development Financing Institutions SME: Small or Medium Sized Enterprise

20. MDGs : Poverty Reduction Economic Growth FDI Trade Infrastructure JBIC PrivateFlows Official Flows ODA,OOF MDGs and JBIC MDGs: Millennium Development Goals

21. JBIC’s contribution to Prototype Carbon Fund (PCF) of World Bank(Committed Total Amount: USD180 million) Committed USD10 million along with 8 Japanese companies (May 2000) Support for the Capacity Building in the Host Countries Support for Mobilizing Institutional Framework, having a seminar regarding Kyoto Mechanisms Financial Support for CDM/JI Projects through: International Financial Operations (Export loan, Overseas investment loan, Untied loan, Guarantee, Equity participation), and Overseas Economic Cooperation Operations (ODA loan) Establishment of the Japan Greenhouse Gas Reduction Fund (JGRF) and Japan Carbon Finance,Ltd. (JCF) The first GHG Reduction Fund in Asia to contribute the achievement of the GHG Reduction target of Japan defined by Kyoto Protocol, and to contribute the sustainable growth in Non Annex I countries JBIC’s Engagement to Kyoto Mechanisms

22. (1) Objectives : To purchase CERs and ERUs (ERs) issued for the crediting period until 2012 from CDM/JI Projects (2) Fund Pool : Called “Japan GHG Reduction Fund (JGRF)”, which JCF can utilize to purchase ERs (3) Committed Fund Amount: Approx. USD 140 million (4) Establishment: December 1, 2004 (5) Location: Tokyo, Japan (6) Fund Providers: Major Japanese Private Enterprises & Policy-lending Institutions JCF was established by some of Major Fund Providers including Japanese Policy-lending Institutions (JBIC, Development Bank of Japan). (7) Project Development Cost (PDD Preparation, Validation, etc.): To be borne by JCF in principle with a certain ceiling (8) Timing of Payment : Payment on Delivery in principle (Upfront Payment is to be made on case-by-case basis) General Outlines of Japan Carbon Finance,Ltd. (JCF)

23. General Outlines of Japan Carbon Finance,Ltd. (JCF) Relationship between JCF & JGRF CDM/JI Project Entities (ERs Seller) Japan Carbon Finance, Ltd. (ERs Buyer) Japan GHG Reduction Fund (Fund Pool) Payment Payment Emission Reduction Resale Agreement Emission Reduction Purchase Agreements (ERPAs) ERs ERs

24. JCF/JBIC Collaboration Scheme *Fund Provision through JGRF JBIC Loan Agreement (L/A) Emission Reduction Purchase Agreement （ERPA) JBIC * CDM/JI Project (ERs Seller) JCF （ERs Buyer) * DBJ Japanese Commercial Banks * Japanese Company A * * Japanese Company B Underlying Finance (Untied Loan, Export credit, Overseas investment loan, ODA loan, etc) Payment for ERs generated during the Crediting Period of the Project Japanese Company C ・・・

25. Example Model for Underlying Finance provided for CDM Projects by JBIC JBIC Overseas Investment Loan Equity Investment Untied Loan, etc Government or Financial Intermediary JCF Japanese Companies orJapanese J/V Purchase of CER (Carbon Finance) On-lending for equipment, working capital etc Debt Investment and/or Sponsorship CDM/JI Projects

26. Strong relationship with host country (government agencies and private sector) built through years of financing operations and our overseas networks of representative offices ⇒Smooth Implementation of Projects Collaboration and Support with/from JBIC Underlying Finance Extensive knowledge and know-how in dealing with environmental projects in developing countries Intermediary Functions: Close and Tight Relationship with Japanese Industry having interest in CDM/JI Projects Accumulation of experience through investment in PCF Advantages of JBIC’s financing for CDM/JI Projects

27. Recent JBIC Press Release on Latin America JBIC Signs Cooperation Agreement on the Kyoto Mechanisms with Corporación Andina de Fomento（CAF): Partnership to Help Achieve Japan's GHG Emissions Reduction Target (April 5, 2005) Website:http://www.jbic.go.jp/autocontents/english/news/2005/000030/index.htm JBIC Signs Cooperation Agreement on the Kyoto Mechanisms with the Colombian Government: Partnership to Help Achieve Japan's GHG Emissions Reduction Target (April 11, 2005) Website:http://www.jbic.go.jp/autocontents/english/news/2005/000034/index.htm JBIC Provides Investment Two-Step Loan to BANCOMEXT: Supporting Japanese Firms' Investment Activities in Mexico through the Cooperation of Two Governmental Financial Institutions in Line with the Japan-Mexico Economic Partnership Agreement (April 12, 2005) Website:http://www.jbic.go.jp/autocontents/english/news/2005/000035/index.htm JBIC Signs Memorandums of Understanding with the IDB Group and Other Parties: Strengthening Mutual Ties for the Support of Japanese Business Activities in Latin America and the Caribbean (April 12, 2005) Website:http://www.jbic.go.jp/autocontents/english/news/2005/000039/index.htm

28. Recent JBIC Press Release on Latin America • JBIC Signs Loan Agreement and Memorandums with • Brazil's Public and Private Sector Entities: • Strengthening Partnerships to Further Consolidate Bilateral Economic Relations • Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed today(May 27, 2005) a loan agreement and four memorandums with Brazilian government, governmental institution and energy and natural resources companies, respectively. Governor Shinozawa and the respective representatives of the organizations signed and exchanged these documents on the occasion of the economic and trade promotion event held in Tokyo attended by President Lula da Silva of Brazil.  • (1) Loan Agreement • An Untied Two-Step Loan to Banco National de Desenvolvimento Econômico e Social (BNDES) for Promoting Infrastructure Development and Export • (2) Memorandums • (a) A Memorandum on Cooperation on the Clean Development Mechanism (CDM) with the Ministry of Science and Technology • (b) ①A Memorandum of Understanding (MOU) for Strategic Partnership as well as ②an MOU on the REVAP Refinery Modernization Project with Petróleo Brasileiro S.A.(Petrobras) • (c) An MOU with Companhia Vale de Rio Doce (CVRD) on the Logistics Infrastructure Program • Website:http://www.jbic.go.jp/autocontents/english/news/2005/000045/index.htm

29. For more information, please contact to International Finance Department III（Tokyo) PHONE:81-3-5218-3060 FAX:81-3-5218-3965 Development Assistance Department IV（Tokyo) PHONE:81-3-5218-3717 FAX:81-3-5218-3973 Representative Office in Bogota TEL:57-1-629-2436 FAX:57-1-629-2707 Representative Office in Buenos Aires TEL:54-11-4394-1379 FAX:54-11-4394-1763 Representative Office in Lima TEL:54-1-442-3031 FAX:51-1-440-9657 Representative Office in Mexico City TEL:52-55-5525-67-90 FAX:52-55-5525-34-73 Representative Office in New York TEL:1-212-888-9500 FAX:1-212-888-9503 Representative Office in Rio de Janeiro TEL:55-21-2553-0817 FAX:55-21-2554-8798 Representative Office in Washington, D.C.TEL:1-202-785-5242 FAX:1-202-785-8484 Website: http://www.jbic.go.jp/english/

30. Reference Address by Prime Minister Junichiro Koizumi on the Latin American and Caribbean Policies- Toward a New Japan-Latin America and Caribbean Partnership – (Extract)(Venue: a luncheon meeting hosted by the Governor of Sao Paulo)September 15, 2004

31. Reference ("A Vision for a New Japan - Latin America and Caribbean Partnership") Ladies and Gentlemen, Divided by the Pacific Ocean but facing each other, East Asia and Latin America are the most dynamically developing regions in the world. To strengthen our efforts in tapping into the "great potential" for our mutual benefit, we need to follow the two guiding principles of "Cooperation" and "Exchange.“ <- Cooperation -> The first principle is "Cooperation." It consists of two pillars; "reactivating the economic relationship" and "addressing challenges of the international community."

32. Reference To realize the latent potential of Japan and Latin America, the most important issue is reactivating our economic relationship. Latin America possesses the dynamism of development, a market of 530 million people, a wide expanse of land, rich natural resources, and an excellent, young workforce. On the other hand, Japan has experience in developing an economy based on democracy and the marketplace, the world's second largest economy, an abundant workforce, capital, and cutting-edge technology.

33. Reference I am confident that if Japan and Latin America, who possess such complementary characteristics, decide to cooperate, it will lead to mutual benefits for both parties. Energy, minerals, and edible resources are indispensable to making possible the sustained growth of the world economy. Endowed with energy and rich natural resources, Latin America continues to grow in importance. To my country, which has few natural resources, securing a stable supply of resources in the mid to long term is an issue of grave importance.

34. Reference During the 1960s and the 1970s, Japan invested heavily in various sectors of Brazil, including ① iron manufacturing, ② pulp, ③ aluminum, and ④ agricultural ventures, as part of a national project to develop Brazilian resources. Many Japanese enterprises moved to Brazil and contributed to the country's economic development. I also want to highlight the Initiative for the Integration of Regional Infrastructure in South America, the Plan Puebla-Panama, and other initiatives being promoted in both South and Central America in promoting the unification of Latin America.

35. Reference Rugged mountains and lush green forests divide Latin America into large expanses. If infrastructure projects could join the region north to south and east to west, then both the promotion of regional integration and the development of the entire region would more quickly accelerate. Recognizing that the maintenance of infrastructure is an important postulate of economic and social development, my country is distributing approximately $4.6 billion of cooperation for Latin American countries in that same area.

36. Reference In order to make the sustainable prosperity of the world community possible, we also need to strike a balance between economic development and protecting the environment. Through the Three R's--Reduce, Reuse, Recycle--I hope to build a sound material-cycle society on a global level. Global warming is also a problem of great magnitude and urgency, one that cannot be set aside, even for an instant. In December of this year, the 10th session of the Conference of the Parties to the U.N. Framework Convention on Climate Change (COP10) will be held in Buenos Aires, where Latin America's leadership will be sought and highly valued. I hope we can work together to achieve early entry into force of the Kyoto Protocol, so we can leave a better earth for the next generation.