Mr. Hitoshi Yukawa, Executive Director of the Bank of Japan, and Mr. S. Aldewereld, Vice President-Finance of the World Bank, signed a loan agreement today at the Bank of Japan in Tokyo under which the Bank of Japan agreed to lend the World Bank Y135 billion.
The transaction would be the largest single borrowing operation in the history of the World Bank, exceeding the previous loan of Yl00 billion from the Bank of Japan in 1972.
The average maturity of the borrowing is 6½ years. The interest rate would be determined as the loan is drawn down through February 20, 1974 and would be based on the yield to original subscribers of Government guaranteed bonds.
This transaction will bring to a total of Y480 billion, the amount which the World Bank will have borrowed in Japan in 14 separate operations, consisting of Y392 billion from the Bank of Japan, Y78 billion through five public offerings and Yl0 billion through a private placement.
Robert S. McNamara, President of the World Bank, issued a statement in the context of this operation confirming the importance of Japan as a source of financing to the World Bank.
"In our efforts to finance an expanding lending program for the benefit of improving living conditions in developing countries the funds made available by the Bank of Japan will be a most welcome and significant support.