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Renewable Japan issues ¥10bn yen bond for financing project in Kagoshima

Out-Law News | 06 Apr 2021 | 2:07 am | 1 min. read

Japan’s energy company Renewable Japan said it has raised ¥10.15 billion yen ($92.42 million) for a 25.76 megawatts (MW) solar project in Minamikyushu city, Kagoshima prefecture.

The company issued a project bond RJ renewable energy project bond IX that will expire in 2041. It is reportedly the ninth green bond and green loan issued by the company in form of project finance. All those bonds have a total value of ¥81.6bn yen.

Once operational, the plant is expected to reduce 10,573 tonnes of carbon dioxide emission each year.

Japan announced in October its aim to cut greenhouse gases to zero and become a carbon-neutral society by 2050.

I-Ching Tseng of Pinsent Masons, the law firm behind Out-Law, said: “The rapid rise in investments in environmental, social and governance (ESG) targets initiated by the United Nations Principles for Responsible Investment (PRI) by investors in the last couple of years has created a considerable new pool of capital specifically targeting green projects. In response to these developments, companies, financial institutions and governments have begun to issue ‘green bonds’ as a means of accessing the capital.”

“As Japan announced its goal to achieve net-zero emissions by 2050 in October 2020, the issuance of green bond / debt picked up significantly and is expected to continue to rise. The substantial expansion in green bond / debt is not unique to Japan, but is reflected globally,” I-Ching said.   

“As the green bonds market is still developing, regulatory or judicial guidance specific to green bonds or green loans are still in their infancy. Indeed, there is no uniform definition of what constitutes green loan or green bond. Rapid developments in legal frameworks are required to ensure that the proceeds are in fact used for the purposes of financing green projects, and that adequate verification and reporting standards are established to safeguard bondholders' rights,” she said.