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Banks get behind private financing for infrastructure

JIJI

The government-backed Development Bank of Japan is joining up with commercial banks to accelerate preparations to promote investments and loans for projects involving the private finance initiative to improve social infrastructure.

The banks are responding to Prime Minister Shinzo Abe’s initiative to triple the size of PFI and public-private partnership, or PPP, projects to ¥12 trillion over the coming 10 years as part of his growth strategy.

Banks intend “to contribute to the initiative by using know-how obtained abroad,” said Japanese Bankers Association Chairman Takeshi Kunibe.

The DBJ opened its promotion center in mid-June. The bank plans to give municipalities and companies advises on how to launch PFIs at exclusive windows opened at its headquarters, blanches and offices across the country.

Among Japan’s three biggest banks, Bank of Tokyo-Mitsubishi UFJ set up a “growth strategy origination team” and created a joint research group with the infrastructure ministry earlier in June.

Mizuho Corporate Bank has strengthened its efforts at its public infrastructure task force.

Sumitomo Mitsui Banking Corp. aims to grab business chances through cooperation with the DBJ and between its departments in charge of investment banking and public customers.

Financial industry people are particularly interested in lending to infrastructure projects, including construction of airports and roads.

After the enactment of a bill to allow the government to sell rights to operate facilities at airports during the ongoing Diet session, trading houses as well as banks are looking for business opportunities.

“Five airports are expected to adopt PFI programs, with Sendai Airport topping the list,” in transferring facility management rights to the private sector, a senior investment bank official said.

The operator of Kansai International Airport and Osaka International Airport is expected to sell such rights early next year at the earliest through an auction.