On February 28, 2020, Daiki Axis issued a “Daiki Axis Green Bond1.”
While promoting ESG management, the Daiki Axis Group plan stipulates the furtherance of environmental improvement as a high-priority policy. The Group is concentrating efforts in the environmental field particularly on (1) overseas water-related infrastructure business expansion (in China, Southeast Asia and India), and (2) renewable energy business with central focuses on solar energy business and small-scale wind turbine generator-related business.
Now through the issuance of a green bond for the purpose of raising funds for solar energy business and small-scale wind turbine generator-related business among renewable energy-related business pursuits, the Group aims to further the cause of environmental improvement and contribute to the realization of a sustainable society.
1 A green bond is a bond issued by a business enterprise or other entity for the purpose of procuring funds needed for “green” (environmentally-oriented) projects, either domestic or international.
|Official Title||Daiki Axis Co., Ltd. First Unsecured Bond (Limited to qualified institutional investors) (Green Bond)|
|Amount issued||¥3 billion JPY|
|Contract date||January 31, 2020|
|Payment date||February 28, 2020|
|Maturity period||10 years|
|Use of Proceeds||The full amount of funds procured will be allocated to refinancing capital investments in plants and equipment in conjunction with solar energy-related electricity sales business and small-scale wind turbine generator-related business.|
|Fiscal agent||Sumitomo Mitsui Banking Corporation|
|Green Bond Structuring Agent2||Sumitomo Mitsui Banking Corporation|
|Investment-Announcing Institutions3||The Iyo Bank, Ltd., The Ehime Bank, Ltd., Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., Mizuho Bank, Ltd.|
2 An agent supporting the issuance of green bonds through advising on green bond framework formulation and second opinion obtainment.
3 Acting as arrangers, the Iyo Bank, Ltd. and Sumitomo Mitsui Banking Corporation have set up a syndicated loan for the purpose of investment in this Green Bond. The Green Bond will be accepted through Sumitomo Mitsui Banking Corporation by means of funds contributed by the abovementioned investment-announcing institutions, which are financial institutions that have agreed to participate in the syndicated loan.
As a third-party assessment of the Green Bond’s eligibility, we obtained a second-party opinion regarding eligibility for the Green Bond Principles (2018) and Green Bond Guidelines (2017) from DNV GL BUSINESS ASSURANCE JAPAN K.K.
The Green Bond is eligible for subsidies under the Financial Support Programme for Green Bond Issuance as stipulated by the Ministry of the Environment (Japan) for fiscal 2019.
With regard to whether projects selected for the allocation of funds procured through the Green Bond conform with the criteria for eligibility, our Finance Department will select candidates from among eligible projects satisfying the below-listed standards and prerequisites related to green bonds and will prepare plans. Final decisions will then be made by our CFO.
|Standards||Green Bond Principles – International Capital Market Association (ICMA), 2018
Green Bond Guidelines – Ministry of the Environment (Japan), 2017
Climate Bonds Standard V2.1 Technical Criteria
|Prerequisites||Compliance with environment-related laws, ordinances and regulations (Performing environmental impact assessments, etc.)
Anticipation of greenhouse gas reduction taking into account the life cycle
Compatibility with local communities
Management of procured funds will be performed by our Finance Department. The ¥3 billion sum procured was allocated to the repayment of loans procured for eligible projects on February 28, 2020.
The state of funds allocated to eligible projects and the results of environmental improvement will be quantified and reported on a yearly basis.
In the case that an eligible project is in the process of construction, its state of funds allocation and progress will first be reported. Then, following completion of construction work for the project, impact reporting will be performed from the subsequently beginning fiscal year until redemption of the bond.