The government may allow the new Japan International Cooperation Agency and a new public financial entity, both involving the consolidation of state-backed financial bodies, to have the same executives, according to sources.
The government wants to maintain the link between official development assistance and the international financing done by the Japan Bank for International Cooperation after the breakup of JBIC, the sources said Wednesday.
The government decided last month to separate JBIC's two central functions, under Prime Minister Junichiro Koizumi's initiative to streamline the public sector.
This latest idea might face strong opposition from some ministries as it could be argued that it runs counter to Koizumi's restructuring idea, some observers said.
A government-appointed advisory panel proposed earlier this week that JICA absorb the aid loan functions of JBIC and JBIC's international financing come under a new state-backed financial institution.
It also proposed that ministries and institutions involved in foreign aid set up a liaison council to link them.
However, the government believes it would be more effective to have executives serve concurrently at the new JICA and the new financial entity, according to the sources.
The government plans to map out the structure of the new JICA and the new financial entity to be launched in fiscal 2008.
The government turned JICA into an independent administrative institution in 2003. It began looking at the future of JBIC and seven other state-backed lenders in the fall after the Diet enacted a law to privatize Japan Post.