Japan's export credit agency is proposing an increase in its budget as it seeks to secure the fossil fuels vital to the country's economy amid a nuclear shutdown.
The agency, Japan Bank for International Cooperation (JBIC),which backs huge power plants throughout the Middle East and has lent billions of dollars to Abu Dhabi National Oil Company (Adnoc), has a key role to play in the wake of the tsunami and earthquake that crippled the Fukushima nuclear power plant last March.
Since the triple meltdown, all but two of Japan's 54 nuclear reactors that once provided up to 30 per cent of its electricity have been shut down, and the economy contracted by 0.7 per cent in the last three months of last year.
"Our role will be more important I think in terms of energy security of Japan," said Hiroshi Kurihara, JBIC's chief representative in Dubai. The budget last year was ¥1.5 trillion (Dh660.4 million), and JBIC is seeking ¥2.5tn this year from the government, which will make its decision this month.
The country is relying increasingly on fossil-fuel imports from the UAE as well as the natural-gas powerhouses of Indonesia, Qatar, Australia and Malaysia.
Japan increased oil imports from the UAE to 301 million barrels last year from 278 million barrels in 2010. With prices for the European benchmark Brent crude topping US$127 a barrel last year, the value of Japan's crude imports from the UAE rose 48.8 per cent, according to the Japan External Trade Organisation.
JBIC, technically the international arm of the Japan Finance Corporation, is scheduled to become independent next month, giving it more flexibility to carry out its mission in backing energy projects that smooth bilateral relations and bring business to companies at home.
Nations such as Japan rely on export credit agencies to fill the gap between how much a project costs and how much private banks are willing or able to lend.
Last March JBIC held $19.4 billion (Dh71.2bn) of Middle Eastern debt that includes financing to build Qatar's liquefied natural gas plants and a Fujairah power plant along with $4.2bn in import loans for Adnoc.
Japan remains one of the few foreign players allowed into Abu Dhabi's closed concessions regime. It holds two small offshore concessions and stakes in two huge offshore joint ventures with Adnoc alongside western majors such as BP, Total and ExxonMobil.
Last year, a Japanese consortium led by Cosmo Oil renewed its contract for a package of offshore fields for a further three decades - and even got an extra field thrown in.
JBIC's loans to Adnoc in 2007 and 2010 - its only ones not earmarked for a specific project in the region - are part of making agreements such as that possible, said Ryutaro Nishizaki, another representative for the agency in Dubai
"Financing for Adnoc is not directly relating to the development of oilfields itself," he said. "Keeping a good relationship with the [national oil companies], such as Adnoc or QP [Qatar Petroleum] or Saudi Aramco, is very important for us to secure the stable supply of natural resources," Mr Nichizaki added.
"I believe Adnoc sees JBIC as a good partner for financing projects, and Adnoc is a very, very important client to us - not just JBIC but also Japan. So there is a win-win situation for both sides."
The Abu Dhabi Marine Areas concession, a contract signed in 1953 between the entities that are today called BP, Total and Japan Oil Development Company, expires in 2018.
"Before that we may consider some support to the renewal of the contract for the company," said Mr Nishizaki. "It is the ultimate goal for Japan itself to continue to have concession rights in Abu Dhabi."
Now JBIC is awaiting the outcome of tenders for Dubai's first private power project and Jordan's planned nuclear reactor. Japanese companies are involved in both bids and JBIC stands ready to back both, especially as the troubles in the euro zone have dried up financing from private banks.
"The availability of financing from the European banks is limited," said Mr Nishizaki. "So, fortunately or unfortunately, our role continues to be very important."
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Bert van Marwijk factfile
Born: May 19 1952
Place of birth: Deventer, Netherlands
Playing position: Midfielder
Teams managed:
1998-2000 Fortuna Sittard
2000-2004 Feyenoord
2004-2006 Borussia Dortmund
2007-2008 Feyenoord
2008-2012 Netherlands
2013-2014 Hamburg
2015-2017 Saudi Arabia
2018 Australia
Major honours (manager):
2001/02 Uefa Cup, Feyenoord
2007/08 KNVB Cup, Feyenoord
World Cup runner-up, Netherlands
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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MORE ON TURKEY'S SYRIA OFFENCE
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
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Price: From Dh825,900
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MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
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