The Bank of Japan and the International Bank for Reconstruction and Development (World Bank) today signed a loan agreement under which The Bank of Japan agreed to lend the World Bank Yen 100 billion.
The transaction would be the largest single borrowing operation in the history of the World Bank.
The average maturity of the borrowing is 6½ years. The interest rate would be determined as the loan is drawn down through December 19 72 and would be based on the yield to original subscribers of Government Guaranteed Bonds.
This transaction will bring to a total of Yen 295 billion the amount which the World Bank will have borrowed in Japan in ten separate operations, consisting of Yen 257 billion from The Bank of Japan and Yen 38 billion through three public offerings.
The loan agreement was signed today at The Bank of Japan in Tokyo. Shiro Inoue, Executive Director, signed on behalf of The Bank of Japan and S. Aldewereld, Vice President - Finance, on behalf of the World Bank.
Robert S. McNamara, President of the World Bank, in a statement welcoming the agreement, pointed out that Japan is now one of the largest sources of borrowings for the Bank.
"These funds,” McNamara said, "are most important for the financing of our expanding program of lending to the developing nations.
“The growing role which Japan is playing in all our activities, in particular by making capital and technical skills available, has significantly contributed to the Bank's operations. I would like to express our gratitude to the Japanese authorities for their cooperation.
"We look forward to a continuing cooperation, not only in the financial field, but also in other common efforts to assist the developing world.”