The government has agreed with the Inter-American Development Bank (IDB) to boost co-financing over the next four years to build infrastructure in Latin America, the Finance Ministry said Sunday.
Japan has raised its co-financing from $1 billion in fiscal 2012 through 2016 to $3 billion for the period through fiscal 2020 to help accelerate infrastructure development in Latin America in the area of renewable energy and energy efficiency.
The loans were designed to assist development in Central America, but the area covered has now been enlarged to include South America, taking into consideration a rising income level that suits quality infrastructure development in the region, a ministry official said.
The financing will be provided in the form of yen loans through the Japan International Cooperation Agency.
The government will also establish a $5 million fund within the IDB to conduct research on potential projects, the ministry said.
"There are likely to be more opportunities for Japanese firms to participate" in infrastructure development projects in the area, the official said.
The move is part of Japan's plan to promote "quality infrastructure investment" in Asia and elsewhere, given China's growing economic influence globally.
Infrastructure demand in Latin America, which has a population of some 600 million people and an economic output of $6 trillion, is around $300 billion a year, according to an IDB estimate.