Nippon Export and Investment Insurance (NEXI) has agreed to provide overseas untied loan insurance for a US$1 billion loan provided by commercial banks to Kuwait Petroleum Corporation (KPC).

The loan will be used to support Kuwait’s oil businesses, thus contributing to stabilizing global oil supply and prices. It also aims to help the Persian Gulf country in its decarbonization efforts, NEXI says.

The Japanese government-owned insurer is providing the bank lenders with 100% political risk and 90% credit risk cover with a 13-year tenor.

Kuwait is one of the largest exporters of crude oil, and one of the most important countries in ensuring energy security. Oil accounts for nearly half of Kuwait’s GDP, around 95% of exports, and approximately 90% of the government‘s export revenue. Kuwait holds approximately 7% of global oil reserves and has a current production capacity of about 3.15 million barrels per day.

State-owned KPC aims to increase oil production capacity to 4.75 million barrels per day (mmb/d) by 2040. It has also announced its intention to boost natural gas production to 4 billion cubic feet per day by 2030.

The insurance NEXI is providing is in line with its LEAD Initiative. (LEAD stands for leading technologies & businesses, environment & energy, alliance and development.) Launched in December 2020, the initiative seeks to underwrite insurance with a total value of 1 trillion yen (US$7.3 billion) by the end of fiscal 2025, improve industrial competitiveness in carbon-neutral and digital fields, and contribute to solving social issues and the United Nations’ Sustainable Development Goals.

NEXI says it will continue to actively support efforts by the Japanese government to address diplomatic/trade issues, promote infrastructure exports, and provide financial support for cooperation projects that will contribute to strengthening bilateral economic ties for Japan to secure resources in the future.