TOKYO – The Japanese government has guaranteed the Development Bank of Japan’s crisis loans to Nissan Motor, Nikkei has learned, a move that could potentially leave taxpayers exposed to future losses from the struggling automaker.

In May, the government-backed lender provided 180 billion yen ($ 1.7 billion) in loans to the automaker. Of that amount, 130 billion yen has been guaranteed by the government, Nikkei has learned.

Under the agreement, the government would have to assume 80% of the secured portion if the loans go badly.

It was the largest government loan guarantee ever given to a large commercial corporation.

As a government-backed institution, DBJ is supposed to save businesses hit by natural disasters or major financial crises, such as the one created by the coronavirus pandemic.

As part of the government-mandated coronavirus crisis support program established in March, DBJ had made 185 loans to companies worth a total of 1.88 trillion yen by the end of July.

Nissan’s loan came after the government agreed to a damage protection agreement in which DBJ pays an annual premium of between 0.1% and 1% of the loan’s value for the collateral.

Nissan was the only borrower to require such a guarantee.

DBJ asked for government support to expedite the lending decision, which came as Japan was under an emergency decree.

Nissan has secured a total of 832.6 billion yen in loans from public and private lenders since April.

A representative for Nissan said the company was unaware the government was acting as a guarantor on its behalf.

DBJ bases its pandemic loans on the size of the borrower and the extent of the damage caused by the virus.