On 20 January 2004, Biwako Bank, Ltd., headquartered in Otsu City, located on Lake Biwa in Japan's Shiga Prefecture, signed an environmental covenant with a client, the paper manufacturer Otsu Itagami Co. In the context of loan agreements, the term covenant means a written agreement specifying loan conditions.

To promote energy conservation and environmental protection, Otsu Itagami started operation of a cogeneration facility in its factory in Otsu City on January 8, 2004, in the process converting its energy source from heavy oil to natural gas. The company expects significant energy conservation and greenhouse gas reduction to result.

This environmental covenant constitutes an innovative effort to grant the company more favorable interest rates based on an assessment of how much the introduction of the new facility will reduce utility costs and greenhouse gas emissions.

The loan will amount to 200 million yen (US $1.87 million),based on an assessment by Biwako Bank of how much Otsu Itagami will be able to reduce greenhouse gases and utility costs. The bank will lower its interest rates if the company meets achievement targets in either of the two fields. A further reduction will be applied if both targets are achieved. The bank reviews its interest rates in June every year.

With respect to approaching environmental problems as business opportunities, the bank has established an internal "Environmental Bank," and takes environmental protection initiatives for the environment as a central tenet of its management policy. Through this Environmental Bank, it hopes to continue financial support for its clients' environmentally friendly activities.

- Biwako Bank¡Çs Financial Services Support Environmental Activities (Related JFS article)
http://www.japanfs.org/db/417-e

Posted: 2004/04/22 04:52:06 PM
Japanese version

TAG Eco-product/Business , Energy , Global warming , Manufacturing industry , Non-manufacturing industry , System/Law