DBJ Arranges Huge Subsidized Loan for Company Based on Environment Rating

The Development Bank of Japan (DBJ), along with 11 regional financial institutions, arranged a syndicated loan of 20 billion yen (about U.S.$204 million) for Kirin Holdings Co. on March 10, 2009. The loan is based on the DBJ's environment rating of the company, and can only be used to fund environmental initiatives.

Financing using the DBJ's Environment Rating system involves scoring companies on their level of environmentally conscious management, selecting the most responsible companies, and establishing loan terms based on their score.

Kirin Holdings, a leading Japanese manufacturer of alcoholic beverages, received the highest environmental rating in this loan evaluation and was honored with a special award for being a role model. The company was recognized for its wide range of initiatives to fight global warming and utilize natural resources more effectively, such as (1) its significant reduction of carbon dioxide (CO2) emissions (49-percent reduction from 1990 to 2007) through comprehensive measures, including installation of photovoltaic units, utilization of biogas, and conversion of boiler fuel; (2) its organizing of large-scale conservation activities in forests located upstream of its beer factories, involving employees and their families, as well as local residents; and (3) its early accomplishment (1994) of a 100-percent rate of recycling byproducts and waste generated at its beer factories, and continuing those efforts.

This syndicated loan utilized an interest rate system subsidized by the Ministry of the Environment for the first time. Of all environmentally conscious financing provided by banking institutions, the Ministry subsidizes the interest on business loans for global warming prevention initiatives, thereby covering some of the necessary expenses. The purpose is to encourage capital investment and research development focused on prevention of global warming, and promote reduction of CO2 emissions related to energy usage. The Ministry budgeted approximately 236 million yen (about $2.4 million) for fiscal 2009 to fund the system.

DBJ: Lending for Environmentally Friendly Management Reaches 102 Billion Yen (Related JFS article)
http://www.japanfs.org/en/pages/026562.html
The Development Bank of Japan official website
http://www.dbj.jp/en/index.html

Posted: 2009/07/30 06:00:15 AM