Exchange of Notes Concerning Loan Aid to Ecuador
1. On September 5, following the Japan-Ecuador summit meeting in Tokyo, Mr. Hitoshi Noda, Ambassador Extraordinary and Plenipotentiary of Japan to the Republic of Ecuador, and H.E. Mr. Jaime Barberis, Ambassador Extraordinary and Plenipotentiary of the Republic of Ecuador to Japan, exchanged notes concerning the provision of a loan aid up to 70 million U.S. dollars in total for the Project for Supporting the Advancement of Energy Matrix Transition, in the presence of Mr. Shinzo Abe, Prime Minister of Japan, and H.E. Mr. Lenín Boltaire Moreno Garcés, President of the Republic of Ecuador.
2. Overview of the Project
Ecuador has been developing hydropower systems using its abundant hydropower resources as one of the pillars for transition of the energy matrix. Meanwhile, many households and primary industries in remote areas and elsewhere are still unconnected to power grids.
In light of these circumstances, this project will support for expanding and strengthening the national power grid and the establishment of legal and institutional frameworks promoting energy saving in Ecuador, through the Co-financing for Renewable Energy and Energy Efficiency (CORE) program with the Inter-American Development Bank (IDB). It is expected that this will enable hydropower-generated electricity to provide a stable power supply to an additional 16,680 households and the consumption sector, including local industries related to key exports, and contribute to promoting energy saving.
3. Loan Terms
|(1)||Rate of interest||:||6-month U.S. dollar LIBOR+110bp|
|(Note) 0.1% interest rate floor|
|(2)||Repayment period||:||25 years (after a grace period of 7 years)|
(Note) This loan will be provided denominated in U.S. dollars. Dollar-denominated loans were established in April 2016 based on the follow-up measures of the “Partnership for Quality Infrastructure” announced by the Government of Japan in November 2015.
(Reference) Japan-Ecuador Relations (Basic Data)
The Republic of Ecuador is a country that has a land area of approximately 256,400 square kilometers (Japanese islands of Honshu and Kyushu combined) and a population of 16.39 million people (World Bank, 2016). It has a gross national income (GNI) per capita of approximately 5,800 U.S. dollars (World Bank, 2016).