APEC export financing bodies to cut risks

APEC export financing bodies to cut risks

TOKYO (AFP): Asia-Pacific export financing institutions proposed yesterday to boost cooperation to reduce investment risks in an effort to raise private-sector funds for infrastructure development, officials said.

The proposal was made during a meeting of export financing institutions from the 18-member countries of the Asia Pacific Economic Cooperation (APEC) forum in Tokyo, the officials said.

It was their first meeting since APEC finance ministers agreed in April in the Philippines resort city of Cebu to set up a regular conference of Asia-Pacific export financing institutions.

The meeting, hosted by the Export-Import Bank of Japan, was also attended by representatives from the World Bank and Asian Development Bank as well as commercial banks.

Participants said in a statement: "Cooperation among export financing institutions, rather than competition, is required as the number of project by multinational consortia is on the rise."

They agreed that the institutions should enhance cofinancing to increase availability of long term debt and sharing political and commercial risks.

"Commercial lenders are usually unable to accept political risks such as war, revolution, expropriation or the unavailability of foreign exchange," some participants said during the meeting.

"Export financing institutions can mitigate risks through approaching the borrower or the host government directly," the statement said. "The role of export financing institutions and multilateral agencies are of critical importance in taking such risks."

They said the current trends in the international capital markets, in particular the issuance of bonds, would become increasingly important.

During the meeting, the participants also called for exchange of information on project appraisal, while calling on host governments to design risk sharing regime. Their next meeting will be held in Malaysia in October.

APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, Taiwan, Thailand and the United States.