|
Overseas Economic Cooperation Operations
(OECOs)
JBIC’s Overseas Economic Cooperation Operations include ODA Loans as a
major financing instrument and constitute a part of Japan’s official
development assistance (ODA) which is extended to developing countries with
obligation for repayment. Therefore, JBIC conducts these operations in
accordance with the policies of the Japanese government. The objective of this operation
is to assist developing countries in their self-help efforts to develop socio-economic
infrastructure and stabilize their economies through provision of concessionary
finance with a long-term repayment period and low interest rate. This financial
assistance is designed to meet various needs of recipients, while research with
regard to development issues and projects is conducted to reinforce the operations.
ODA Loans
On December 1, 1999, JBIC unveiled the "Medium-Term Policy for
Overseas Economic Cooperation Operations", which explicitly laid down the priority
areas for its ODA loans. The basic approach of JBIC is to support self-help efforts
toward economic takeoff and country ownership of development. JBIC looks on Asia
as its primary concern and places its focus on three areas:
- Support for socio-economic development and poverty reduction
- Action on global issues
- Support for economic reform
More specifically, JBIC seeks to strike a desirable balance
between the development of socio-economic infrastructure and industries that is
conductive to sustainable economic growth, and the equitable distribution of the
fruits of growth through measures that reduce poverty and promote social development.
JBIC will also intensify its efforts to address environment, energy and food problems,
and intends to respond effectively to currency and other crises.
|
Concessional loan conditions
As a general rule, ODA loans are provided at a low interest
rate. For example, ODA loans approved in fiscal year 1999 had an average rate
of 1.4% per annum with an average repayment period of 33 years and one month.
Furthermore, a grace period (between seven and ten years) has been established
within these loans. The characteristics of ODA loans is the concessional conditions
that take into full account the prevailing conditions in developing countries.
|
|
Procurement conditions
Procurement of goods and services are
necessary for project implementation. Under and ODA
loan, he principal condition is "general untied", under
which procurement can be made from almost any country
in the world. In practice, international competitive
bidding (ICB) is carried out in order to purchase high
quality but inexpensive goods and services from the
world.
|
| -> |
For details on procurement, go to Guidelines where related guidelines can be downloaded. |
|
|
Target regions
ODA loans are provided to developing countries, in which Asia
accounts for about 80% of its share, followed by Africa, Latin America, and the
Middle East. In recent years, assistance to Eastern Europe and Central Asia has
been increasing, making the number of ODA loan recipient countries as 93 at the
end of fiscal 1999.
|
Target sectors
ODA loans are targeted mainly to socio-economic infrastructure
such as power, transportation, telecommunications, irrigation and agriculture.
In recent years, target sectors are diversifying; including, among others, support
for economic stabilization of countries facing economic difficulties, environmental
conservation, social development and human resource development.
|
|
Types of ODA loans
(click here for more details)
ODA loans come in various forms, depending on the needs of the developing countries.
|
• Project type
|
-
-
- |
Project loans
Engineering services (E/S) loans
Financial-intermediary loans (Two-step loans) |
|
• Non-project type
|
-
-
- |
Commodity loans
Structural adjustment loans (SAL)
Sector program loans (SPL)
|
|
ODA loan procedures (project cycle)
(click here for more details)
ODA loans are carried out in accordance with the following series of procedures.
- Project preparation
- Loan request
- Examination, appraisal
- Exchange of Notes (E/N), Loan Agreement (L/A)
- Project implementation
- Completion, post-evaluation and follow-up
|
|
