In a first for the company, Tokyo Gas Company Limited plans to issue green bonds through a public offering platform. Tokyo Gas is set to issue the 10-year green bonds to the tune of ¥10 billion (~$95 million) in December 2020.

The capital procured from the green bonds will be allocated to renewable energy projects undertaken by Tokyo Gas. It plans to finance and refinance two solar projects; the 514 MW Aktina solar PV project located in Wharton County, Texas it acquired from Hecate Energy, a privately-held independent solar project developer in July 2020. The second project is the 63.2 MW Annaka solar PV project in the Japanese Gunma Prefecture it acquired from private equity firm Asia Pacific Land in February 2020 through its subsidiary, Prominet Power.

According to Mercom Capital Group’s global solar funding and M&A report, oil and gas majors were the major acquirers of solar assets in 1H 2020 and accounted for about 6.5 GW (45%) of acquisitions.

The lead managers handling the green bond issue are Mitsubishi UFJ, Morgan Stanley Securities Company Limited, and SMBC Nikko Securities Incorporated.

DNV GL Business Assurance Japan K.K. – a third-party assessment organization – is evaluating and verifying the bond’s conformity with various standards related to green bonds’ issuance.

Tokyo Gas has received a preliminary evaluation – GA1 – from the Rating & Investment Information Incorporated the highest score possible in R&I green bond assessments according to the company.  Besides, Tokyo Gas has received certification under the standards of the Climate Bonds Initiative (CBI), an international, investor-focused not-for-profit that stipulates standards to ensure the credibility and transparency of green bonds.

Tokyo Gas aims to use the green bonds to finance its management’s vision ‘Compass 2030’ that aims to achieve Net Zero CO₂ emissions, including consumer emissions, and transition to a decarbonized society. The company aims to drop emissions by 10 million tons by 2030.

Recently, ReNew Power, an Indian independent power producer, raised around $325 million through overseas green bonds.

Meanwhile, the Allied Irish Bank (AIB) had announced that it had issued green bonds worth €1 billion (~$ 1.16 billion) to finance projects with climate change benefits. According to its press statement, AIB has become the first Irish bank to complete a green bond issuance. It is also the second European bank to raise supplementary capital by issuing a green bond.