Japan’s participation in overseas infrastructure will prioritise airports, high-speed rail, urban mass transit, roads, ports and water/wastewater infrastructure, the country’s government said on Thursday (23 March).
Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) released an updated list of 76 major overseas projects that are a focus for investment by Japanese companies, part of an initiative to marshal the resources of the country’s huge conglomerates and banks.
The move is part of a renewed push to export and finance Japanese expertise in view of the USD 26 trn the ADB estimates that Asian countries (excluding Japan) will need to spend by 2030 on new infrastructure.
Japan is targeting JPY 30trn (USD 269.9bn) worth of infrastructure exports by 2020.
In May last year, Japan’s Prime Minister Shinzo Abe pledged USD 200bn of funding support for “quality infrastructure” projects up to 2020.
The latest MLIT list features an increased emphasis on South-east Asia, and includes 22 new projects such as Manila’s metro mass transit.
SMBC is one of the major financial institutions in Japan that is readying finance for big rail-related projects and is interested to lend to Line 7 of Manila’s metro, Asia head of project finance Luca Tonello told InfraAsia.
The MLIT report highlights the need for early involvement in project preparation and identification, as well as increased backing from government entities.
Specifically, the ministry mentioned the Japan Bank for International Cooperation (JBIC), Japan International Cooperation Agency (JICA) and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) as agencies that would be expected to play a prominent role.
The pipeline of projects means that overseas development assistance (ODA) loans from JICA are playing a less prevalent role while higher cost funding from JBIC and JOIN is assuming a greater role.
Seven projects in the Philippines are included on the latest MLIT list – the third-highest number for a single country after Myanmar (nine) and Vietnam (eight).
The list also includes specific projects in India (six), Sri Lanka (five), Indonesia (four), the US (three), Thailand (three), Cambodia (two), Egypt (two) and Kenya (two).
The emphasis on high speed rail (HSR) projects has already gained traction in developed countries, where Japanese companies are already pitching for major contracts in Texas and California as well as HS2 in the UK.
These projects account for three of four specific projects highlighted in the US and the UK on the MLIT list but are not new to the list this year.
Another carryover from last year is the Mumbai-Ahmedabad HSR in India. Japanese companies are also looking to participate in the Bangkok-Chiang Mai HSR in Thailand and the Kuala Lumpur-Singapore HSR project as well as Vietnam’s proposed high speed link between Hanoi and Ho Chi Minh City.
Specific projects in Australia are not included in the list, where MLIT sees Japanese companies forming consortia with Australian companies to participate in projects.
Bangladesh, Kyrgyzstan, Lao, Mongolia, Papua New Guinea and Palau all account for one project each on the list, as does an airport project in Russia and sewerage project in Ukraine.
In Latin America one project each was mentioned for Colombia, Panama and Peru.
In Africa and the Middle East, Israel, Turkey and United Arab Emirates (UAE) are included on the list, as having one potential project each, as are schemes in Angola, Cote d’ Ivoire, Ghana, Madagascar, Mozambique, Morocco, Nigeria, Uganda and Senegal.