LONDON: The role of Japan in financing major energy projects around the world will come under scrutiny quickly, following last week's earthquake. Via its state agencies Japan Bank of International Cooperation (JBIC) and Nippon Export and Investment Insurance (Nexi), Japan has followed a policy of providing cheap long-term finance to fund energy projects in countries which supply Japan with natural resources. There are a host of major schemes around the world into which JBIC/Nexi is due to provide finance. The news that Saudi Electricity Company (SEC) has delayed the bidding for the 1800 megawatt-2200 megawatt Qurayya independent power project (IPP) is the first visible sign of the concerns. In the short term, SEC wants the Japanese companies to bid for Qurayya but under current circumstances, it needs to give them more time. In the longer term there is a more important global strategic question looming. Will Japan Inc. now focus, at a time of high budget deficits, on funding infrastructure projects at home or will it continue to invest overseas? Target markets for this competition will include Australia, the country enjoying a significant natural resources boom.
