The Japanese government is planning to provide funds to Vietnam’s water-supply project using official development assistance, as a step to boost infrastructure exports by the nation’s private firms to emerging economies, Kyodo news agency quoted sources familiar with the matter as saying Wednesday.
The move follows Tokyo’s decision earlier this year to supply long-term funds to other nations at low interest rates with an eye on promoting exports of infrastructure-related projects such as railway and nuclear power plant construction.
The government is also considering investing in the Philippines’ highway construction project with ODA and taking measures to support the economies of Asian developing countries utilising technologies of Japan’s small and midsize enterprises, the sources said.
Japan has lagged behind other nations including South Korea in infrastructure exports.
In cooperation with the private business sector, the government of Prime Minister Naoto Kan will aim to strengthen its efforts to help Japanese companies receive more orders from abroad.
The infrastructure export promotion will be one of the key steps for an economic growth strategy that the government mapped out in June.
In the plan, Tokyo pledged to resume investment in infrastructure projects of other countries with the use of ODA.
Among ODA projects, provisions of yen loans target governments of other nations, but investment funds are poured directly into their projects carried out by the private sector through the state-run Japan International Cooperation Agency.
As for the water project in Hanoi, the capital of Vietnam, Japan’s Metawater Co., established by NGK Insulators Ltd. and Fuji Electric Holdings Co., will set up a joint venture with local firms and undertake construction and management of the water treatment plant, the sources said.
Negotiations on the issue are in the final stage and the total cost of the project is now estimated to reach around 50 billion yen, they said, adding the JICA will likely invest up to 2 billion yen in the venture.
ODA investment was abolished in fiscal 2002 in Japan, but the government decided to revive it in December in the face of requests from the business community claiming that Japan could fail to survive against international competition in infrastructure exports.
