Japan to Agree $800 Million Loan to Fund Panama Canal Expansion

By Shigeru Sato

Oct. 27 (Bloomberg) -- The Japan Bank for International Cooperation, the state-owned overseas lender, said it will sign an $800 million syndicated loan for the expansion of the Panama Canal that will help Japan boost trade with the Americas.

JBIC, as the state bank is known, will offer $400 million, and Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. will provide another $400 million, said JBIC spokesman Ryutaro Nishizaki. The loan contract will be signed by year end, he said.

The Panama Canal Authority said last month it would arrange a total of $2.3 billion in loans from overseas lenders for the $5.2 billion project. The expansion of the 93-year-old waterway will help Japan boost imports of iron ore and crude oil from Brazil and liquefied natural gas from Trinidad Tobago, as well as increase exports of electronics to North and South America.

The canal authority will borrow $500 million from European Investment Bank, $400 million from the Inter-American Development Bank, and $300 million each from the International Finance Corp. and Corporacion Andina de Fomento, it said on its Web site.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net;