With oil prices surging around 40 percent in 2016 and coal up by more than 50 percent, many argue that a slump in commodities since the global financial crisis is over.

But JBIC Governor Akira Kondoh told Reuters in an interview late last week that the bank was not rushing to expand lending, with Japanese trading houses and resource companies, typical clients of JBIC, having taken heavy impairment losses on their energy and commodity investments in the last two years.

"If trading houses post impairment losses, that will have an impact on our loans so that would be something that we need to carefully watch," Kondoh said.

The development bank lends to projects from shale oil and gas developments in the United States to solar farms in Jordan and has more than $120 billion in loans for energy and other industrial projects, according to its most recent annual report.

"As a government financial institution, we would like to take risks that the private sector cannot take, like very long-term loans. But we are using money from the Ministry of Finance and tax payers," Kondoh said.

The bank is paying more attention to onsite visits to ensure the viability of projects, said Kondoh, who recently went to a nickel mine run by Sumitomo Corp and other companies in Madagascar.

Kondoh added that recent energy price gains may not be sustainable.

"If oil prices rebound, the number of rig counts in the U.S. shale gas and oil will increase again. Judging from the global supply and demand situation, we have to be cautious on the oil price outlook," he said.

(Additional reporting by Yuka Obayashi and Osamu Tsukimori; Writing by Aaron Sheldrick; Editing by Joseph Radford)

By Yoshifumi Takemoto