Japanese Banks Take Top Three Places in Project Finance Lending
Japanese banks took the top three places in Poten’s 2021 ranking of LNG project finance lenders, after occupying the top two places last year. Mizuho and Sumitomo Mitsui Banking Corp. switched places as Mizuho moved up to the top spot with SMBC coming in second. Bank of Tokyo Mitsubishi (MUFG) came up through the ranks and was third after slipping in the LNG ranking last year from its second place the year before.
Three French banks – Societe Generale, Credit Agricole, and BNP Paribas – came in fourth, fifth and sixth, followed by the Industrial and Commercial Bank of China, then Italy’s Cassa Depositi e Prestiti (CDP) and the Netherlands’ ING in a tie at eighth place, with Spain’s Santander rounding out the top ten.
Most of the top places in the ranking were taken by banks that supplied large quantities of funding for the Mozambique LNG project and refinancings for Australia’s Ichthys LNG and for Cheniere Energy and Freeport LNG Train 3 in the US, which attracted a combined $6.1 billion in funds.
All the top places, with the exception of CDP, are taken up by lenders which typically have a big presence in LNG project finance. CDP’s arrival in at such a high position in the rankings is understood to have been due to a big contribution to Mozambique LNG for the tranche covered by Italian export credit (ECA) agency Sace.
Some of the top ten banks supplied “tickets” of over $500 million to the two biggest deals which were concluded for Mozambique which attracted at total of $15.4 billion of debt from banks and ECAs and for Ichthys LNG which attracted $8.2 billion for its refinancing of both ECA-covered and uncovered debt.
Other deals influencing the 2021 rankings included Nigeria LNG’s Train 7 – which is a corporate-project finance hybridIndian regasification projects and LNG ships structured as limited recourse project finance.
Import projects and LNG ships tend to have a smaller impact on the rankings because capital expenditure is lower than for liquefaction projects. Also, import and LNG-to-power projects are typically supported by development banks and export credit agencies (ECAs). They usually attract only small amounts of commercial bank funding, if they can get it at all.
A total of 74 lenders from 20 countries provided the LNG project finance funds in 2020. This amounted to almost $24 billion in loans, which was double the previous years’ totals (see project finance lending data).
Poten’s bank ranking focuses on commercial banks, but includes other types of lenders, such as development banks, export credit agencies (ECA), institutional investors and even finance divisions of equipment manufacturers and contractors where they have provided funding in tranches alongside commercial banks. However, the ranking does not include ECA and development bank tranches where they are separately making direct loans, and often in very large amounts, outside commercial bank tranches.
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