Nippon Export and Investment Insurance, a government trade insurance arm known as NEXI, and the Export-Import Bank of the US will jointly guarantee lending to Ethiopian Airlines for the purchase of 787 Dreamliners as part of an effort to boost exports of the new Boeing Co. BA -0.41 percent aircraft to emerging markets, The Nikkei reported early Thursday.
The African carrier plans to buy 10 Dreamliners, with the aim of expanding operations with the fuel-efficient aircraft. It intends to borrow slightly more than $900 million from at least one US financial institution to cover most of the $1.1 billion total cost.
The Ex-Im Bank will fully guarantee this loan’s repayment, with NEXI to reinsure a portion of the amount. The lending will be guaranteed for 12 years, and the premium will be 3-4 percent.
Japanese companies such as Mitsubishi Heavy Industries Ltd, Toray Industries Inc. and Panasonic Corp. have been deeply involved in the Dreamliner project from the development stage. They manufacture about 35 percent of the plane, including the wings, fuselage, tires and cabin. NEXI believes that promoting the Dreamliner will help the nation’s aircraft parts industry.
So far, Boeing has received orders for 859 units, but deliveries have been made only to two Japanese carriers-All Nippon Airways Co. (9202) and Japan Airlines Co.-because of production delays. Ethiopian Airlines will be the first firm outside Japan to receive the plane.
With demand for passenger jets expected to grow in emerging markets, the trade insurance bodies of Japan and the US intend to offer loan guarantees and to take other steps to promote exports.