Models of Green Bond Issuance

Model Cases of Green Bond Issuance

In the Green Bond Guidelines, 2017, several Green Bond issuance model cases are examined, and the issuer, nature of the green project, the green bond scheme, and others were presented in each case.

CASE 1
An SPC executing wind and solar power generation projects raises funds for the projects.
CASE 2
A financial institution raises funds for loans for renewable energy projects, such as solar, wind, and biomass power generation, and the construction of energy efficient houses and other buildings.
CASE 3
A waste treatment company raises funds for the construction of a new facility to recover rare metal in its plant premises and the installment of advanced treatment equipment in the facility for wastewater containing hazardous chemicals.
CASE 4
A manufacturing company raises funds to renovate plants to increase energy efficiency and to build a new energy efficient head office building.
CASE 5
A financial company, a group company of an automobile manufacturer, raises capital by securitizing loan claims for loans to purchasers of low-emission electric and hydrogen vehicles through a trust plan.
CASE 6
A local government raises capital to implement renewable energy, energy efficiency, waste treatment, and flood control projects as part of a climate change adaptation program.
  • Please refer to the Green Bond Guidelines, 2017 Chapter 4 Model Cases for more information.
  • Note, however, that these model cases of issuance are only examples and many other cases exist where Green Bonds can be used.

Green Bond Issuance Case Studies

The Ministry of the Environment is implementing Pilot Project for Green Bond Issuance, in order to introduce Green Bonds issuances cases that comply with the “Green Bond Guidelines 2017” and can be regarded as model cases to promote issuance and investments of Green Bonds in Japan. As of September 2019, the compliance of the issuances of six companies, namely the Japan Railway Construction, Transport and Technology Agency, Hokuriku Green Bond Co., Ltd., NYK Line, Mitsubishi Estate Co, Ltd., Japan Housing Finance Agency, Fuyo General Lease were confirmed.

MODEL1 Projects for clean transportation Japan Railway Construction, Transport and Technology Agency An Illustration:都市鉄道利便増進事業として進められている神奈川東部方面線の路線図

  • Selected in the first offering for the 2017 project for creating a Pilot Project for Green Bond Issuance.
  • In November 2017, a pre-issuance report was released after compliancewas confirmed by the Ministry of the Environment and the Verifiers.

Project overview (use of proceeds)

The following two railway paths have been newly established on Kanagawa eastern district line (Sotetsu/ JR direct lines, Sotetsu/ Tokyu direct lines) as part of the project promoting urban railway convenience.

  • A connecting line between Nishiya Station on the Sotetsu Main Line and the area of Yokohama Hazawa Station on JR East Tokaido Freight Line (approx. 2.7 km).
  • A connecting line between the area of Yokohama Hazawa Station on JR East Tokaido Freight Line and Hiyoshi Station on the Tokyu Toyoko Line (approx. 10.0 km).
An Illustration:北陸地域地方公共団体完全LED化包括事業におけるグリーンボンドの発行フレームワークの事業スキーム図

Source: Japan Railway Construction, Transport and Technology Agency

Environmental benefits
Reduction of CO2 and NOx emissions by shifting transportation mode from automobiles to railway (modal shift)
1,800 t-CO2/year
18 t-NOx/year
Verifiers
E&E Solutions Inc.
Japan Credit Rating Agency, Ltd.
Sustainalytics
Pre-issuance report
Pre-issuance report (Japanese text only.)PDF

MODEL2 Projects for energy-efficiency Hokuriku Green Bond Co., Ltd.

  • Selected in the second offering for the 2017 project for Pilot Project for Green Bond Issuance.
  • In March 2018, the pre-issue report was released after compliance was confirmed by the Ministry of the Environment and Verifiers.

Project overview (use of proceeds)

Project to change existing lighting equipment owned by municipalities in three Hokuriku districts into LED by an ESCO project

Schematic diagram

Role sharing within the scheme
  • Hokuriku 1st GB Project Co., Ltd.: Green bond issuance, representative of the project, fund management, etc.
  • Hokuriku Green Bond Co., Ltd.: Green Bond issuance support, projectmonitoring, reporting, etc.
  • Selected operators: survey, design, management system development, construction, operation, and maintenance, etc.

Source: pre-issuance report of the compliance check (2) with the Green Bond Guidelines related to FY2017 Pilot Project for Green Bond Issuance

Environmental benefits
Reduction of CO2 emissions through energy conservation by using LED lighting equipment
Verifiers
Rating and Investment Information, Inc.
Pre-issuance report
Pre-issuance report (Japanese text only.)PDF

MODEL3 Projects for Environmentally Friendly Vessel NYK (Nippon Yusen Kaisha)

  • Selected in the FY 2018 project for Pilot Project for Green Bond Issuance.
  • In May 2018, the pre-issue report was released after compliance was confirmed by the Ministry of the Environment and Verifiers.

Project overview (use of proceeds)

Investment toward vessel and equipment installation projects indicated in NYK’s “Roadmap for Environmentally Friendly Vessel Technologies,” such as (1) LNG-fueled ships, (2) LNG bunkering vessels, (3) ballast water treatment equipment, and (4) SOx (sulfur oxides) scrubber systems, etc.

Source: NYK “Announcement on the Issuance of Green Bond (Unsecured Corporate Bonds No.40)”

Environmental benefits
Reduce CO2, SOx, NOx emission (annual reduction compared to heavy oil fueled ships) by installing LNG-fueled ships.
Contribute the preservation of biodiversity by preventing the transfer of aquatic organisms with ballast water treatment equipment.
Reduce SOx emission (sulfur removal rate from exhaust gases) by installing scrubber system.
Verifiers
E&E Solutions Inc.
Japan Credit Rating Agency, Ltd.
Pre-issuance report
Pre-issuance report (Japanese text only.)PDF

MODEL4 Urban Redevelopment Project Mitsubishi Estate Co., Ltd.

  • Selected in the FY 2018 project for Pilot Project for Green Bond Issuance.
  • In June 2018, the pre-issue report was released after compliance was confirmed by the Ministry of the Environment and Verifiers.

Project overview (use of proceeds)

“Tokyo Tokiwabashi Project facing Tokyo Station*” Tower A (Primary Use: Office, retail, parking, etc. Total floor area: Approx.146,000㎡.
* Tokyo Tokiwabashi Project facing Tokyo Station

  • A large-scale redevelopment project covering a total area of 3.1 hectares, the largest in the vicinity of Tokyo Station.
  • It includes the development of an approximately 390 m super high-rise tower that will become a new landmark for the city of Tokyo and a spacious plaza measuring approximately 7,000 ㎡ that will transform the area in front of Tokyo Station, all of which will be developed and equipped in stages. The project is a designated project for the National Strategic Special Zone Program.
  • The project will be carried out in stages over a 10-year period while maintaining and updating vital infrastructure functions including sewage pumps and transformer substations within the district.
Tokiwabashi District Redevelopment Project Overview
Project Title Tokyo Tokiwabashi Project facing Tokyo Station (Otemachi 2-chome Tokiwabashi District Category 1 Urban Redevelopment Project)
Location Otemachi 2-chome, Chiyoda-ku and Yaesu 1-chome, Chuo-ku, Tokyo
Site area Approx. 31,400㎡
Total floor area Approx. 686,000㎡
Dimensions of each structure Green Bond
Use of Proceeds
Tower A
(Under Development)
Tower B Tower C
(Under Development)
Tower D
(Under Development)
Primary use office, retail, parking, etc. office, retail, parking, etc. retail, electrical, substation, parking, etc. office, sewage pumps, parking, etc.
Total floor area Approx. 146,000㎡ Approx. 490,000㎡ Approx. 20,000㎡ Approx. 30,000㎡
No. of floors/height 40 aboveground, 5 belowground / Approx. 212m 61 aboveground, 5 belowground / Approx. 390m 1 aboveground, 4 belowground 9 aboveground, 3 belowground / Approx. 65m
Start of construction
(scheduled)
January 2018 FY2023 Phase Ⅰ
January 2018
Phase Ⅱ
FY2023
April 2017
Completion of construction
(scheduled)
End of April 2021 FY2027 End of April 2021 FY2027 March 2022
Design and Supervision Mitsubishi Jisho Sekkei Inc. TBD Mitsubishi Jisho Sekkei Inc. TBD Mitsubishi Jisho Sekkei Inc.
NIHON SUIKO SEKKEI Co., Ltd.
Construction TODA CORPORATION TBD TODA CORPORATION TBD Sumitomo Mitsui Construction Co., Ltd.
Operators Mitsubishi Estate Co., Ltd., Tokyo Metropolitan Government Bureau of Sewerage, Daiwa Securities Group Inc., Isetan Mitsukoshi Holdings Ltd., Tokyo Electric Power Company, Inc., Otemachi Development Co., Ltd., Urban Renaissance Agency, others

Exterior Image(from the Nihonbashi River side)

* Projected image of the whole project

Source: Mitsubishi Estate “Announcement of the issuance of the Mitsubishi Estate Green Bond to fund the Tower A of the Tokiwabashi District Redevelopment Project in front of Tokyo Station”

Environmental benefits
  1. ①Tower A of the Tokyo Tokiwabashi Project facing Tokyo Station
    • Energy reduction (Utilize heat coming from a DHC(District Heating and Cooling), installation of solar panel, Low-E glass, and automatic lightning control of LED)
    • CASBEE Top S rank equivalent is projected (CO2 reduction will be yielded compared to existing energy efficient buildings)
    • DBJ Green Building Certification 5 stars qualification is granted
  2. ②Tower A of the Tokyo Tokiwabashi Project facing Tokyo Station common plaza
    • Greening approx. 1/3 of spacious plaza around Tower A(approx. 3,000㎡)
    • Effort to conserve biodiversity(projected to be qualified for Certification by Association for Business Innovation in harmony with Nature and Community (ABINC®) and SITES® Certification
Verifiers
E&E Solutions Inc.
Japan Credit Rating Agency, Ltd.
Pre-issuance report
Pre-issuance report (Japanese text only.)PDF

MODEL5 Project for energy efficient houses Japan Housing Finance Agency

  • Selected in the FY 2018 project for Pilot Project for Green Bond Issuance.
  • In December 2018, the pre-issue report was released after compliance was confirmed by the Ministry of the Environment and Verifiers.

Project overview (use of funds)

The funds of the green bond will be allocated to purchases of residential mortgages named as “Flat 35 type S.” The residential mortgage product provides the financial support with lower interest rate and is applicable only to the houses that accomplish high level of performance such as in energy efficiency and earth quake resilience and etc. In this particular green bond issuance, the houses must be newly constructed and meet the technical standard for energy efficiency for “Flat 35 type S.”

Image of green bond issuance

Source: Japan Housing Finance Agency

Environmental benefits
Reduction of CO2 and energy use by installing energy efficient newly-constructed houses
※Technical standards for energy efficiency
  • 【Flat 35】type S, interest rate plan A
    • Approved low carbon houses
    • Houses with primary energy consumption level 5
    • Houses with the approval of energy efficiency improvement plan
      (The Building Energy Efficiency Act)
    • Approved houses with long-term excellent performance
  • 【Flat 35】type S, interest rate plan B
    • Houses with thermal insulation performance level 4
    • Houses with primary energy consumption level 4 or higher
Verifiers
E&E Solutions Inc.
Japan Credit Rating Agency, Ltd.
Pre-issuance report
Pre-issuance report (Japanese text only.)PDF

MODEL6 Leasing project for the so-called “Japanese RE100” Fuyo General Lease

  • Selected in the FY 2019 project for Pilot Project for Green Bond Issuance.
  • In June 2019, the pre-issue report was released after compliance was confirmed by the Ministry of the Environment and Verifiers.

Project overview (use of proceeds)

Fuyo General Lease publicized “Fuyo RE action Support Program,” in which the company provides a leasing opportunity with favorable condition to companies and other entities. The applicable companies must participate in the so-called “Japanese RE100”, a unique Japanese program for small and medium-sized companies and other entities aiming to achieve RE100, and lease renewable energy equipment or energy-saving equipment.
※Official RE100 participating companies are also applicable

Source: Fuyo General Lease

Environmental benefits
Reduction of CO2 by leased equipment
Reduction of CO2 by Japanese companies installing renewable energy
Verifiers
E&E Solutions Inc.
Japan Credit Rating Agency, Ltd.
Pre-issuance report
Pre-issuance report (Japanese text only.)PDF