2FEBRUARY
2024

S U S TA I N A B I L I T Y
BRIDGE TO THE FUTURE

S P E C I A L F E AT U R E

SUSTAINABILITY: BRIDGE TO THE FUTURE

SUSTAINABILITY:
BRIDGE TO THE FUTURE

information within JBIC changed dramatically. Until then, each department
had been making its own efforts to contribute to sustainable development, but
now we are all able to get a handle onsuch internal initiatives.”
OKADA Yuno, who works with
HAYASHIinthe
Sustainability
Management Department, says, “We
are also receiving casual inquiries more
often—questions like, ‘Is this related tosustainability? ’ This brings home therealization that we are involved in a project’s decision-making.”
HAYASHI adds, “Since the 1980s,
JBIC has been offering preferential
interest rates for eco-friendly projects, and conducting due diligenceaccording to JBIC Guidelines for
Confirmation of Environmental andSocial Considerations. JBIC has been
making continuous efforts to monitor
such considerations and the impacts ofthese projects on the surrounding natural environment and social environment.
I believe such ongoing initiatives also
made it easier to get all departments on
the same page when strengthening thesustainability governance and management systems.”

Not a day passes without issues such as decarbonization, biodiversity,and human rights appearing in the news —sustainability has become a topic
on everyone’s mind. But regrettably, Japan’s contributions
to solving the world’s sustainability issues are not that well known.
In this issue’s special feature, frontline sustainability management staff
at the Japan Bank for International Cooperation (JBIC) speak
about the current status of, and JBIC’s support system for, such initiatives
around the world that leverage Japan’s strengths.

Illustration: MIYAZAKI Kouhei

JBIC’s perspective on current global sustainability issues
Sustainability is shifting from the age of government-led initiatives to one in which companies take action.
The focus of sustainability has diversified, now covering not only climate change but also challenges
including biodiversity and the circular economy.
JBIC has formulated an ESG policy and is facilitating financing to realize sustainable development.

Projects that do not consider
sustainability no longer exist“Sustainability” is a term that has comeinto global use relatively recently. UN
conferences on the environment havebeen held since the 1970s, but it was
the 1992 Earth Summit (Rio Summit)that spread the concept of “sustainable
development,” which aims for a balance
between the environment and economic
growth. And it was after Sustainable
Development Goals (SDGs), to beachieved by 2030, were proposed at the
UN Sustainable Development Summit
2015, that the word “sustainability”
began appearing everywhere. Today, theconcept of sustainability has broadened
further and become more comprehensive, focusing on three aspects:
environmental, social, and economic.
In the past, sustainability action
tended to be government-led measures
implemented through international
agreements. But this has graduallyshifted to a phase in which the private
2

JBIC TODAYFEBRUARY 2024

sector needs to be proactive. The Japan
Bank for International Cooperation (JBIC)
released its ESG Policy in October 2021,
followed by the establishment of the
Sustainability Management Department
to strengthen its sustainability governance and management systems in

Director
Division 2, Sustainability Management Department
Corporate Planning Group, JBIC

HAYASHI Kaori
Joined the bank in 2002. After assignments including
the Environmental Assessment Office, International
Finance Department I, and secondment to the OECD,she served at the JBIC Representative Office inSingapore where her broad range of responsibilities
included surveys on Southeast Asia and Oceania’s
policy trends. Assumed her current post in July 2022.

June 2022.
“I have come to understand that
pursuing and establishing sustainability is an area inextricably interlinked
with the core of management,” says
HAYASHI Kaori of JBIC’s Sustainability
Management Department, reflecting
back on her early days in the post
and how her thinking has changed.
“Sustainability is now a vital issue, andevery day I consult with management
about this. It is very rewarding work.”
Though JBIC was focused on
addressing global-scale issues even
before the release of the ESG Policy,
ahead of the 26th Conference of theParties to the United Nations Framework
Convention on Climate Change (COP26)
held in Glasgow, UK, JBIC released its
ESG Policy as a statement of its strong
commitment to achieving sustainability,
centering on its response to climatechange. “After releasing our ESG Policy,
we also accelerated efforts for sustainability management. We were thefirst among the policy-based financial

institutions of OECD member countries
to make a disclosure based on therecommendations of the Task Force on
Climate-related Financial Disclosures(TCFD), and we also released a humanrights policy. We are developing such initiatives with domestic and international
needs always in mind,” says HAYASHI.
JBIC’s efforts to bolster its sustainability governance and management
systems do not end there. At the sametime the Sustainability Management
Department was established, theSustainability Advisory Committee wasinstituted as an advisory body to theBoard of Directors, and the Sustainability
Committee was set up under the
Executive Committee. In addition, theGlobal Investment Enhancement Facility
was launched in July 2022. It supports
Japanese companies in their efforts
to contribute to global environmental
protection including decarbonization,enhance supply chain resilience, develop
high-quality infrastructure, and create
new overseas markets.
HAYASHI says that after these systems
were implemented, sustainability-related information was centralized, withboth JBIC internal and external information dissemination and discussions
within the organization gaining speed.
“The circulation of sustainability-related

Wide-ranging areas of support
and addressing issues
that are difficult to quantify
About a year and a half have now passed
since the launch of the Sustainability
Management Department. HAYASHI saysthat while she sees promising results,
she is also keenly aware of the challenges that remain. “For areas where wehave a track record, such as decarbonization, people in charge already have quitea high level of awareness. However, forexample, for projects related to biodiversity, natural capital such as water,
and the circular economy (economic
activities creating new added value
while circulating the use of resources),there are cases where the persons incharge fail to recognize that they are sustainability issues. I believe that there isa growing need to raise awareness andprovide information on these areas froma sustainability perspective.” OKADA
adds, “Sustainability is a single wordthat covers a wide range of topics. Since
all kinds of projects can fall under its
scope, we keep learning constantly. We
hope to stay aware of the connection
between projects and sustainability, andsteadily raise awareness.”
JBIC’s sustainability-related financing
can be divided into three major categories: green finance, which supports
efforts to reduce greenhouse gas emissions and popularize green innovation;

Division 2, Sustainability Management Department
Corporate Planning Group, JBICOKADA Yuno
Joined the bank in 2021. Assumed her current post
following assignment to New Energy and Power
Finance Department I, where she was charged withproject financing for power generation businesses
centering on renewable energy in the Middle Eastand North Africa regions.

transition finance, which supports shifts
to energy with less environmental
impact; and social impact finance, which
supports resolving social issues for therealization of sustainable growth.
“Predictably, in the areas of green
finance and transition finance, there area large number of projects related torenewable and next-generation energy,
particularly those around offshore wind
power and hydrogen utilization,” reports
HAYASHI.
Inquiries are also increasing for projects that contribute to natural capitaland a circular economy. For example,
projects that indirectly support operations contributing to areas such assustainable fishing and the recovery of
biodiversity and ecosystems throughpartial acquisition of Blue Bonds issued
by the Indonesian government (SDG
bonds where use of funds is limited tothe marine sector, such as protectionof marine resources). “Compared todecarbonization, biodiversity and thecircular economy are difficult to quantify
through clear numerical data. And unlike
global warming, these are areas that are
difficult to sense on a day-to-day level.
But they are without question globally
important challenges,” states OKADA.
In the area of social impact finance,business development that considers
the perspective of sustainability toaddress various social challenges ison the rise. HAYASHI notes, “There aremany countries that have unstable living
environments because their medical
systems have not been able to keep up
with growing needs. For example, wehave provided a loan for a business
manufacturing and selling medical
devices in Vietnam. And in Singapore,
we are supporting a Japanese company’s participation in business selling andmarketing pharmaceuticals and medical
devices in Asia. We are also promoting
projects that contribute to improving
FEBRUARY 2024

JBIC TODAY

3

S P E C I A L F E AT U R E

SUSTAINABILITY: BRIDGE TO THE FUTURE

Waste-to-energy: tackling environmental issues in emerging India

JBIC’s key sustainability-related projects (environment area)
Turkey± Loan to Industrial Development Bank of Turkey
under the second GREEN credit line

France± Project financing
for offshore wind farm projects± Equity participation in a fundfor hydrogen-related projects

Saudi Arabia and Egypt± Loan to Saudi
Electricity Company (SEC)
for an interconnector
project± Loan for acquisition of stake in e-scrap(electric and electronic waste)

Uzbekistan

USA± Loan for a natural gas-fired
combined cycle power plant project± Financing to a company
for hydrogen station construction
and operation

TaiwanMexico± Financing for
the Hai Long offshore windproject

UK and Germany± Project financing for
an interconnector project

India, home to 1.4 billion people, is growing rapidly. But urban waste is becoming a serious societal issue.
Under the banner of “Clean India,” the Indian government is working to solve this problem while using heatfrom waste incineration for power generation. Japanese tech is supporting this initiative.

Canada± Partial acquisitionof SDG bonds

India± Loan to SJVN Limited
for solar power projects± Loan to Power Finance Corporation
Limited based on a credit line
for a waste-to-energy project

Egypt± Project financing foronshore wind farm projects± Loans to the Government of
Benin under a GREEN credit line

Benin

Vietnam± GREEN credit line for Vietcombank± Loan for a biomass fuel production and sales projectIndonesia

Malaysia± Partial acquisition of publicly
offered Samurai bonds (Blue Bonds)
issued by the Indonesian government± Loan to a business manufacturing
and selling recycled PET resin

local health and hygiene standards.”

Fourth Medium-term Business Plan
(FY2021-FY2023) is to achieve diversity
and inclusion. “JBIC’s efforts to realizea ‘colorful world’ are also being put
into practice internally both through ahuman resource development systemthat draws out the capabilities and vitality of its diverse range of employees,
and the promotion of workstyle reform,”
notes OKADA.
The situation has changed significantly from the days when sustainability
was considered a charitable activity akinto volunteerism, to a stage where it istaken seriously as a business goal.
HAYASHI also states emphatically, “I
believe that commitment to and practice of sustainability will also become
an even more important pillar of our
new medium-term business plan fromFY2024. The expectation on our department’s roles and responsibilities within
JBIC will also rise.”

Toward the realization of a“colorful world” and how to put this
into practice
In addition, with the aim of supporting
female entrepreneurs in ASEAN andother Asian countries, JBIC is also
investing in the Japan ASEAN Women
Empowerment Fund (JAWEF), a fundthat provides loans and equity to microfinance institutions. According to OKADA,“The aim is to support the promotion ofgender equality. We are participating inthis together with Japanese institutional
investors who support its goals.”
Of course, positioning sustainability as a management challenge also
makes it necessary for JBIC itself toenhance the resilience of its organizational foundation by ensuring that allof its employees can work sustainably.
Indeed, one of the goals laid out in the

There is still much more that JBIC
should do, and that only it can do. OKADA
explains, “I believe our significance as apolicy-based financial institution lies in
the fact that we can deploy financing toareas that other institutions and companies are not yet tackling. While thinking
a little ahead, we wish to realize projects
to help solve environmental issues andsocial challenges.”
Japanese companies have built
solid trust in the international networks,
centering on Asia, and international
expectations are high for hydrogen fueland other new environment-related
technologies from Japan. Based on the
JBIC Policy designed to promote sustainability, JBIC will continue to provide
support in countries and regions aroundthe world. Using the power of Japan for
the future of a sustainable world—thebuildup of steady support will take theworld another step forward.

Changes in the international environment in the area of sustainability and JBIC’s steps
1992

Adoption of the UN Framework Convention
on Climate Change

2008

G8 Hokkaido Toyako Summit

1997

Adoption of the Kyoto Protocol

1990

2000
1999

1992

Establishment
of JBIC Guidelines for
Confirmation ofEnvironmental andSocial Considerations

Establishmentof the Global Environment Office

4

JBIC TODAYFEBRUARY 2024

2015

2010

Adoption of the KunmingMontreal Global
Biodiversity Framework

2020

Establishment of the JBIC Facility
for Asia Cooperation and Environment (FACE)

Support for
Clean Development Mechanism(CDM) projects

2022

Glasgow Climate Pact

Adoption of the Paris Agreement and SDGs

2008

2000s

2021

2010

2023

2021

Release of
Human Rights Policy

Releaseof ESG Policy

Start of Global action
for Reconciling Economic growthand Environmental preservation(GREEN)

2022

First disclosure basedon the recommendations of
the Task Force on Climate-related
Financial Disclosures (TCFD)

Power generation using waste has been used throughout Japan since its highgrowth period of the 1960s. The spread of Japanese technologies is expected
to contribute to solving India's economic and social infrastructure challenges.

About 70 percent of waste is buriedin landfills, while energy issues
and sanitation need addressing
Driven by the world’s largest population,
India now ranks fifth globally in terms ofGDP. With that momentum behind it, some
forecast it will surpass Germany and Japan
in 2027 to become the world’s third-largest
economy. However, one problem emerging
in parallel with rapid development and ahuge population is waste.
India’s urban waste is currently 0.4 kilograms per capita per day. This is expected
to increase by 50 percent to 0.6 kilograms in
2030. The vast population inevitably makes
waste disposal a critical societal problem.
In addition, nearly 70 percent of waste inIndia is disposed of in landfills, a very highpercentage by global standards, with theremaining 30 percent currently recycled orused for power generation. As urbanizationis set to rise alongside population growth,concern about an increase in untreatedwaste is intensifying.
One solution is waste-to-energy, a power
generation system in which household
waste is processed and the emitted heat
converted into electricity. While there areregional differences in collection methods,
the post-collection process is basically thesame, with the results depending largely on
the operator’s experience and matters suchas technological capabilities in power generation efficiency.
The government announced the “Swachh

Photo courtesy of
Hitachi Zosen Corporation

Bharat (‘Clean India’ in Hindi) Mission-Urban
2.0” in October 2021 as the second phaseof the policy, with the aim of making cities
across India waste-free and promoting theestablishment of waste treatment facilities,
including waste-to-energy plants. India
depends on coal-fired power generation
for more than half of its electricity, so thegovernment has set a target of increasing
power generation capacity from non-fossil
fuels to 500 GW by 2030. Waste-to-energy
not only contributes to that goal, but hasother benefits as well. “Reducing landfills
for waste disposal will also help improveIndia’s sanitation problems,” explains
YONEYAMA Satoru of JBIC’s Infrastructureand Environment Finance Group, who has
been conducting negotiations with India.
The government of India has allocated USD19 billion of its budget towaste-to-energy and recycling. Since thewaste-to-energy market is projected to
grow at about 20 percent a year, Japanesecompanies are naturally taking note of thisexpanding sector. JBIC also has a trackrecord in waste-to-energy in other countries,
providing support for such projects in the US
in 2017, Sweden in 2019, and Dubai in 2021.

states of Maharashtra (total loan: approx.
JPY2.6 billion - JBIC portion: approx. JPY1.5
billion) and Karnataka (total loan: approx.
JPY1.8 billion - JBIC portion: approx. JPY1.1
billion). These are individual contracts basedon a credit line totaling up to JPY30 billion(JBIC portion: JPY18 billion) that was signedwith PFC in July 2022 to provide funding forrenewable energy projects, energy-efficient
power generation and heat supply projects
in India.
Waste-to-energy is an area in which the
track record and advanced power generation technologies of Japanese companies
can be leveraged. Such projects are also inline with JBIC’s green finance objectives.
However, some unique local issues emergedin negotiations with stakeholders, recalls
YONEYAMA. “In a usual loan, we conduct
negotiations with the borrower. But in thiscase, since we had to add the step of collecting information on each project from its
operator through PFC, while checking thedetails of the loan agreements between PFC
and the project operators, the coordination
process was quite time consuming.” Smoothcommunication was also a challenge. “Dueto the pandemic, meetings had to be held
online, but we were unable to move forwardwith our talks even when contacting themthrough emails or phone calls. So, after
travel restrictions were eased, I visited India
repeatedly, and through direct negotiations,finally managed to reach an agreement.”
Although they involve confronting such
unique challenges, YONEYAMA finds thesewaste-to-energy projects to be very meaningful. “Being able to contribute to solving
India's environmental and social issues
through waste-to-energy using Japanesetechnologies is meaningful for both India
and Japan, and so is very rewarding.” With
this as a first step, JBIC will continue to support India's promotion of renewable energy
through various initiatives including use of
the credit line with PFC.

Overcoming India’s unique challenges
to promote renewable energy projects
totaling 30 billion yen
In 2023, JBIC signed loan agreements with
Indian government financial institution
Power Finance Corporation (PFC) to support waste-to-energy projects in the central

Director
Division 2, Social Infrastructure Finance Department
Infrastructure and Environment Finance Group, JBIC

YONEYAMA Satoru

FEBRUARY 2024

JBIC TODAY

5

S P E C I A L F E AT U R E

SUSTAINABILITY: BRIDGE TO THE FUTURE

From Europe to Asia, from onshore to offshore— wind power is catching a tailwind

Recent wind power projects supported by JBIC

The world’s wind electricity generation has approximately tripled in the past decade.
Due to the accelerated shift to renewable energy, it is expected that new construction of offshore wind farms will increase.
Whether a site is suitable for a wind farm depends heavily on wind conditions.
This requires the formulation of business plans that consider seasonal changes in addition to wind volume and direction.
Unlike Europe, offshore wind farms in Asia must accommodate rough waves and typhoons,but there are expectations that knowledge gained abroad can be applied in Japan.

Project NameLe Tréport

Noirmoutier

Red Sea

Hai Long

Northern France

Western France

Total loan (approx.)(JBIC portion in parentheses)

EUR2.4B(EUR1.1B)

EUR2.2B(EUR1.1B)

USD500M(USD240M)

TWD117.1B (Loan: JPY101.2B, Guarantee:
TWD4.7B, Equity participation: TWD8.8B)

Power generation capacity(approx.)

500MW

500MW

500MW

1022MW

Onshore or offshore

Offshore

Offshore

OnshoreOffshore

Participating
Japanese companies

Sumitomo Corporation

Sumitomo Corporation

Toyota Tsusho Corporation,
Eurus Energy Holdings Corporation

Country / Region

Eastern Egypt

Western Taiwan

Mitsui & Co.
*Reference: TWD1 = USD0.032 (as of January 2024)

project in the UK that we supported in2018 as an example of our achievements
in Europe, and proposing a PF project
and financing scheme in collaboration
with local financial institutions.”

The expansion of onshore wind farms in
Egypt supports the transition
from thermal power to renewable energy
Europe is the homeof offshore wind power
The race is on for sites
with good wind conditions
Following solar power, the potentialof wind power as a renewable energy
source is attracting worldwide attention.
Solar power requires expansive tractsof land or facilities to install panels, andbecomes inoperable at night. In comparison, wind power has the advantage ofbeing able to generate electricity day ornight as long as there is a wind. According
to the International Renewable Energy
Agency (IRENA), global wind power
generation approximately tripled in the
10 years from 2013 to 2022.
There are two types of wind power:
onshore and offshore. Of the two, recent“Fixed” and “floating” offshore wind turbines

Areas suitable for fixed or floating wind turbines
depend on the depth of the waters. The floatingtype is very suitable for a country like Japan, whereshallow waters are limited. Floating turbines are stillin the pilot stage, with expectations rising for developments that also apply the strengths of Japanesetechnology in areas such as shipbuilding.

6

JBIC TODAYFEBRUARY 2024

years have seen offshore wind power
gaining traction, with Europe holding amajority share. Currently, offshore wind
power is primarily the “fixed” type inwhich the turbine is mounted on a foundation affixed to the seabed. It is said
that suitable sites for these fixed turbines
are generally waters less than 60 metersdeep. On the other hand, the “floating”
type, where turbines float on the ocean
surface, is seen as having greater future
potential since it can be used in deep
waters, increasing possible locations.
Offshore wind power is popular in
the United Kingdom and Scandinavia
as they are surrounded by the sea andlie within the zone of the prevailingwesterly winds. In the UK, wind power
accounts for more than a quarter of allelectricity consumed. “I think this islargely due to the fact that Europe had
good access to sites with good windconditions,” explains IWAORI Kyohei of
JBIC's Infrastructure and Environment
Finance Group. He says that because
Europe had many places with suitablewind volume and direction, it was easy
to make investments. “The key to wind
power development is just how quickly
you can find and secure sites with goodwind conditions. Of course, in the caseof Europe, I think the fact that a system
was in place from early on to support thedevelopment of renewable energy was
also instrumental.”
JBIC is also participating in thisbooming European market throughFrench offshore wind farm projects.
In April 2023, JBIC signed loan agreements for project financing (PF) of two
French offshore wind farm projects(Noirmoutier and Le Tréport), in which

Sumitomo Corporation and othercompanies have also invested. Loansof up to approximately EUR1.1 billion
will be provided to Noirmoutier (total
co-financing amount: approx. EUR2.2
billion) and up to approximately EUR1.1
billion to Le Tréport (total co-financing
amount: approx. EUR2.4 billion). They
will each build, own, and operate an
offshore wind farm with a generation
capacity of approximately 500MW, andafter the start of commercial operations,the electricity generated will be sold tostate-owned EDF (Électricité de France)
for a duration of 20 years.
The French government enacted theLaw on Energy and Climate in 2019,
which set a target of having renewables
account for at least 40 percent of total
electricity generation by 2030. This
included a plan to increase offshore
wind power capacity to 2.4GW in 2023
and to 5GW in 2028. As these two projects were a part of that plan’s measures,it was necessary to quickly finalize them.
SASAKI Kensuke, who worked withIWAORI on these projects, says, “This was
JBIC’s first offshore wind farm project inFrance. As there was a large amount ofmoney involved and challenges unique toFrance, while involving the Representative
Office in Paris, we worked from various
angles to finalize the scheme.”
One of the challenges JBIC faced
was the fact that it did not possess thelicense required for direct financing inFrance. However, it was able to complete
the deal by demonstrating that evensuch a foreign financial institution could
quickly structure a project. According to
SASAKI, “We gained their understanding by pointing to an offshore wind farm

Offshore wind is driving the market interms of new construction starts, butwith onshore turbines becoming larger,
there is still room for more developmentof these wind farms if sites with goodwind conditions can be secured. A casein point is a PF project for which JBIC
signed a loan agreement in March 2023
with an Egyptian company. Investors
include Toyota Tsusho Corporation andEurus Energy Holdings Corporation.
“This second project builds on the
success of the first one, for which we
signed a loan agreement in 2017, byincreasing the electricity generation
capacity,” explains OGAWA Riki, who
was in charge of this project for JBIC.
The Egyptian government aims toincrease the share of renewable energy
sources in the electricity mix to 35
percent by 2030, and to 42 percent by
2035. It is expected that this project will
help promote Egypt’s shift to renewableenergy from the thermal power generation on which it is heavily dependent.
“The area where the wind farm will
be located is subject to seasonal wind
patterns, with conditions worsening in
winter compared to summer. We put
together a repayment plan that takes
this into account so that the project canproceed smoothly,” says OGAWA.

A pioneering case of offshore wind
power in East Asia with participationof multilateral stakeholders
A project supported by JBIC is also
underway in Asia, a latecomer in offshore
wind power. In 2023, JBIC participated in
the Hai Long offshore wind farm projectin Taiwan, in which Mitsui & Co. andother companies hold equity shares. PF
agreements for loans of approximately
JPY101.2 billion and guarantees of up
to approximately TWD4.7 billion weresigned in September, and a shareholders’ agreement for up to TWD8.8 billion
was signed in October.
In March 2022, Taiwan announced“Taiwan’s Pathway to Net-Zero Emissions
in 2050,” which calls for increasing the
proportion of renewable energy in its
power supply to 60-70 percent by 2050.
The promotion of offshore wind power isin line with this renewable energy transition policy. In Taiwan, sites suitable foroffshore wind farms are concentrated on
the west side of the main island, whichfaces mainland China and where thisproject is located.
ITO Yuki of the Infrastructure andEnvironment Finance Group recalls, “In
addition to being JBIC’s first offshore
wind power project in Taiwan, it was ahuge project in terms of the size of theloan. There were also many stakeholders
involved so it took quite some time tostructure the project.” Because there isa limit to the amount of money that asingle financial institution can bear, theparticipation of multiple financial institutions becomes essential for large-scale
projects. In the end, this project received

Suitable sites for onshore wind power are limited toopen fields, but it has advantages over offshore wind
power in terms of cost, construction, and maintenance.

loans from private financial institutions
and other organizations, and obtained
guarantees from seven institutions in
six countries: the UK, Norway, Belgium,
Canada, Australia, and Japan. TAMURA
Masayuki, who was also responsible
for the project, notes, “Offshore wind
power projects in Taiwan attract a great
deal of attention, but there are still few
precedents, and the supply chain is also
underdeveloped. We carefully proceeded
to examine the feasibility of the project,centering on construction risks.”
Compared to Europe’s stable seafloor
geology, Taiwan’s is more complicated.
There is also the risk of typhoons andother natural disasters. In addition,
coordination with the fishing industry
is essential, presenting high hurdles toimplementing a project.
“However, Taiwan is taking the lead in
Asia’s offshore wind power, so there arehigh expectations that the expertise andexperience gained there can be appliedelsewhere, of course including Japan,”notes ITO.
Amid the global renewable energy
transition, expectations for wind power
are growing. JBIC will also support its
promotion from both land and sea.

New Energy and Power
Finance Department ,Infrastructure andEnvironment Finance Group

Deputy Director
Division 2 (EMEA & Americas)

Division 2 (EMEA & Americas)

Division 2 (EMEA & Americas)

Division 3 (Asia)

Deputy Director
Division 3 (Asia)

IWAORI Kyohei

SASAKI Kensuke

OGAWA Riki

TAMURA Masayuki

ITO Yuki

FEBRUARY 2024

JBIC TODAY

7

Our People and Their Work

Director
Division 3
Energy Solutions Finance Department
Energy and Natural Resources Finance Group

FUKAYA Satoko

JBIC engages in various projects around the world.
Senior JBIC staff on the front line share their thoughts
and stories behind their projects.

Joined the bank in 2005. She handled sovereign credit assessmentin the Country Credit Department;
launched policy dialogue with theIndonesian government at the JBIC
Representative Office in Jakarta; andengaged in work including providing
a guarantee for Indonesia’s Samurai
bonds, co-financing with the World
Bank, and projects in Russia, Central
Asia, and Africa in the finance divisions. She is now doing an impressive
job juggling her work and parenting.

Financing a solar power project and an initiative for electrified lanterns in elementary schools in the Republic of Benin

The first GREEN initiative project for a government in Africa— an unexpected encounter kickstarts
a project contributing to society
A financing deal for two projects in line with global ESG trends was signed with the Republic of Benin,a country in West Africa with a low electrification rate. FUKAYA Satoko and HIRATO Hitomi share their stories.

Steady efforts to build a relationshipturned coincidence into opportunity“Could you grant us an opportunity
to meet with you...” Numerous lettersand messages with this request weresent to the Republic of Benin’s Ministerof Economy and Finance, but failed to
produce a response. Deciding that theyneeded to go in person to make any
progress at all, the director general of theEnergy Solutions Finance Department
flew to Benin. Accompanying him was
HIRATO Hitomi, who had only joined
JBIC three months before.
“By pure coincidence, Benin’s Economy
and Finance Minister Romuald Wadagni,
whom I had been trying to contact all thistime, was on the same plane. Our director general, who was acquainted withthe minister, called me to join him in an‘in-flight meeting, starting now.’ Thanks tothis brief meeting in a corner of the plane,
we were able to arrange another official
meeting with the minister in Benin.”This unexpected encounter flung
open the doors for a project that HIRATO
was tasked with. Although JBIC had
signed a credit line agreement with thegovernment of Benin in March 2021,
no significant progress had been seen

stable both politically and economicallycompared to other African countries andthat it had a lot of potential. Then, a highlevel meeting with President Talon at the
7th Tokyo International Conference on
African Development (TICAD 7) held in
Yokohama in 2019 provided an occasion
to build a relationship with the government of Benin. This agreement was thefruit of our work on this relationship overthe past few years.”around talks on specific projects due todifferences in time zones and businesspractices. It was initially assumed thatthe credit line would be fully utilized
for financing an electrified lantern project for elementary schools. However,through the meeting on the plane andthe ensuing meeting in Benin, it became
clear that the government of Benin
had other projects in mind requiring
priority funding. After these meetings,
numerous negotiations continuously
took place, and eventually, in June 2023,
a decision was made to co-finance two
projects: providing EUR29 million for asolar power project and EUR1 million for
an electrified lantern project.
This is the first loan for an African government to come under ‘Global action
for Reconciling Economic growth andEnvironmental preservation’ (GREEN)
operations, and is also JBIC’s first loan
for Benin.
FUKAYA Satoko, Director of Division
3, Energy Solutions Finance Department,
and HIRATO’s supervisor, explains the
background to the agreement: “We had
been receiving proposals from trading
companies about loans for Benin, but
none had been realized. However, wewere aware that Benin was comparatively

Funds provided for two GREEN projects
under a credit line with the Benin government

Adjustments made after hearing
Benin’s request
Contributions also made for its
promotion of renewables
Benin is located in West Africa andimports fossil fuels and electricity fromneighboring countries such as Nigeria.
It has a low electrification rate, in the 40
percent range, and its energy self-sufficiency ratio is only around 10 percent.
The government of Benin had thus also
been searching for solutions from theperspective of energy security.
In its national development plan, thegovernment of Benin has set a goal oflaunching solar power generation facilities
with a total capacity of 150 MW by 2026.
Through this loan, a solar facility with acapacity of 25 MW and two substations

MoroccoAlgeria

Mauritania
GambiaMali

SenegalGuinea-Bissau
Sierra Leone

GuineaBurkina
Faso
Ghana

Liberia Coted’Ivoire

Togo

Libya

Egypt

Chad

Sudan

Niger

Benin
Nigeria
Porto-Novo
Cameroon

Central African
Republic

South
Sudan

Division 3
Energy Solutions Finance Department
Energy and Natural Resources Finance GroupHIRATO Hitomi
Joined the bank in 2022. Her responsibilities include setting up GREEN
projects for African governments andmanaging existing projects. After
graduating from Waseda University,
School of Political Science andEconomics in 2019, she moved toFrance and received her Master’s inCommunications, Media, and Creative
Industries from Institut d'études politiques de Paris (Sciences Po) in 2021.

are slated to be built within the grounds ofan existing 50 MW solar plant, one of thecountry’s largest. “Expanding the supplyof electricity produced by clean energy
is expected to help promote Benin’s
adoption of renewable energy and also
improve the distorted energy structurethat is dependent on other countries’
fossil fuels,” says HIRATO.
The electrified lantern project
involved installing solar panels on theroofs of elementary schools in areas
with no electricity access, and allowing
students to take home lanterns thathave been charged with the generated
electricity. Japanese non-profit GOOD
ON ROOFS consulted JBIC on the implementation of this initiative in Benin, andthe credit line agreement was signedwith this as a candidate project.
“However, when we spoke with theminister, we learned that in addition to
the lantern project, there was a need fora larger scale solar power generation as
well,” says FUKAYA. Moreover, the minister had expressed concern about thesustainability of the lantern project. “Hepointed out that the lanterns supplied tothe children could be stolen, broken, or
sold to obtain daily food.”

Project
Summary

Although it is important to adjust a
project while ascertaining the needs ofthe loan recipients, a project’s social contribution must not be overlooked. In thecase of the lantern project, more children
will be able to attend elementary school.
According to HIRATO, “In the GOOD ON
ROOFS project, the lanterns that the children take home would not only provide
light for their homes but can also be used
to recharge their parents’ cell phones.
This gives parents an additional motivation to send their children to school.”

Recognizing the potential
for social contribution via financeThis is a small project compared to otherloans to African countries that have beenhandled by the Energy Solutions Finance
Department. Nevertheless, with the growing global interest in ESG investment,

and the movement to push sociallysignificant projects such as in environmental conservation and education, “webecame aware of JBIC’s potential in thisfield as well,” notes FUKAYA.
HIRATO, who handled the project on
the ground, notes with pride that, “Howserious the Benin government is about
this can be seen from the fact that they
opted for a loan, rather than aid or a
yen loan. The fact that we could conduct
discussions as equals should be mutually beneficial for further enhancing ourbilateral relationship.”The virtuous circle of social contribution through finance will continue toexpand around the world as a means
to support sustainable growth. HIRATO
is also eagerly looking forward to JBIC,
and herself as an employee, playing arole in supporting such activities.

(Left) Lantern recharging devices connected
to solar panels installedon the school roof.
(Right) Receiving lanterns from elementary
school children.

Using a credit line agreement signed with the Government of the Republic of Benin in March 2021, co-financing of EUR29 million (JBIC portion up to EUR14 million) for a solar power project and EUR1 million (JBIC
portion up to EUR500,000) for an electrified lantern project for elementary schools was decided in June 2023.

Congo

Press releases on the solar power project (left) and the electrified lanterns for elementary schools project (right)
8

JBIC TODAYFEBRUARY 2024

FEBRUARY 2024

JBIC TODAY

9

President
KOBAORI Co., Ltd.

KOBAYASHI Shingo
Joined the company in 1989, and in 2004 became its
third president. While aspiring to find solutions tosocial issues within and outside Japan, he is always
attentive to detail when it comes to his employees, andis open and friendly with them in the office. He enjoys
trail running, and it was during runs over uneven terrain that he noticed fields and paddies that had beenabandoned. This was one reason why he began thinking about how to put unusable rice (that is not used as
feed, such as old rice and crushed rice, or discarded
during the distribution process) to good use.

KOBAORI Co., Ltd.

A long-established manufacturer of auxiliary materials
for clothing seeks new opportunities by collaboratingwith other industries toward a decarbonized society
Working with the developer of Rice Resin, a biomass plastic made from unusable rice, the company is manufacturing anddistributing the new material in Vietnam as part of its mission to address social issues through diversified business operations.

The DNA of innovative spirit
started with woven clothes labels
KOBAORI Co., Ltd., headquartered in
Kyoto, manufactures and markets all
kinds of apparel-related auxiliary materials, such as the brand name and laundrycare labels that are found on clothing, as
well as packaging for garments.
This long-established materials manufacturer was established in 1947 as awholesaler of woven labels (the smalllabel displaying the brand name, usuallyaffixed to the inside of the garment neck)for men’s clothing. It now manufacturesand sells bioplastics in Vietnam. The
reason for this new direction lies in thecompany’s business philosophy thatkeeps it in step with the times—a trait
that has been carried forward since its
founding.
Looking back at KOBAORI’s history,
almost all clothing was tailor-made

10

JBIC TODAYFEBRUARY 2024

in its early years. But by the time thesecond president took over in the 1970s,
mass production led to ready-to-wear
garments appearing in department
stores. KOBAORI had been selling labels
mainly to tailors, but with that businessdeclining, it turned its attention to shoes.
Many shoes at that time were imported,making brand labels necessary. It quickly
became a booming business for thecompany, boosting sales because eachpair of footwear requires two labels, one
for each shoe.
Subsequently, the Japanese fashionindustry shifted much of its production
overseas. Major companies in theapparel market handle a wide variety
of garments and need to produce morethan 100 million labels. As this is ancillary work for apparel manufacturers,
there is a limit as to how much they
can handle. Foreseeing this situation,
KOBAORI took on the production of not

The Vietnam plant mainly supplies plastic manufacturers with Rice Resin as a raw material for biomass
plastics.

looking at the site with my own eyes,
while always being mindful about minimizing risk by being prepared to pullout at any time if something happens. I
make it a point to remember this stancewhen expanding overseas.”
In 2018, the company began film
packaging production in Hanoi, Vietnam.
One reason was that it was looking todiversify risk away from concentrating
operations in China. But it was justaround that time that growing awareness of environmental issues started amajor movement in the world to reduce
the use of plastics. “Although I felt thatthe fashion industry as a whole, whichuses large amounts of plastic packaging,had to respond to this trend, since we
had already established a plant, I was
searching for some way to continue thisbusiness.”

Manufacturing biomass plastic
using unusable rice in Vietnam
KOBAYASHI was facing this dilemma

when he met KAMIYA Kazuhito,
Representative Director & CEO of
Biomass Resin Holdings Co., Ltd.
KOBAYASHI was deeply moved by
KAMIYA’s passion to spread the use of"Rice Resin," a biomass plastic developed using old rice and other rice waste
unsuitable for human consumption,
and also help solve agricultural problems such as how to effectively use
the increasing amount of idle farmlandin Japan. It could also address thechallenge confronting KOBAORI in
becoming environmentally friendly.
Says KOBAYASHI, “I want to make Rice
Resin a global brand. To that end, I want
us to work together to supply the product in Vietnam.”
In 2021, KOBAORI and Biomass Resinestablished a joint venture in Vietnam tomanufacture and sell biomass plastic,
and began the manufacture of Rice Resinusing the facilities of KOBAORI’s existing
plant. A loan from JBIC is also being
used to spread the use of Rice Resin in
Vietnam using locally grown unusable
rice.
Going forward, the company alsoplans to manufacture in Vietnam a biodegradable plastic “Neoryza” derived
from unusable rice. Taking the opportunity of its expansion into the bioplastics
business, KOBAORI is making further
advancements in manufacturing thatincorporate a sustainable perspective.
These include the creation of wallets
and school satchels using “rice leather,”a material made using Rice Resin.
KOBAYASHI hopes to spread the use of
Rice Resin as a new material that can beapplied in the fashion industry and serve
as a bridge in its efforts to reduce plastic
use. “I would like to continue to fully use
ideas for the creation of materials andproducts using Rice Resin." He alreadyhas his sights set on the next challenge.

KOBAORI Co., Ltd.
1947

Company established1995

Established a wholly owned
subsidiary in Shanghai, China

2001

Established a packaging bag
factory as a joint venture in
Qingdao, China

2012

Established a joint venture inIndonesia

2018

Established a joint venture in
Vietnam

2021

Formed a capital and businessalliance with Biomass Resin
Holdings

only labels, but other auxiliary materials
such as garment packaging, and grew its
business. “We have proactively engaged
in new ways of business that are rarely
seen in this industry. This might be dueto the DNA passed down through thegenerations in this company,” says
KOBAYASHI Shingo, the third presidentof the company, reflecting on its history.

Confronting changes in the public’s
environmental awarenessjust as it began overseas productionof plastic packaging
In response to requests from apparel
manufacturers who had shifted theirproduction overseas, auxiliary materials
companies set up production facilities
nearby. In 1995, KOBAORI establisheda manufacturing center in Shanghai,
China, and in 2001, also began manufacturing packaging for garments in
Qingdao, China. “I make decisions after

Rice Resin is a biomass plastic from Japan derived from rice. It is used not
only in manufacturing packaging bags and stationery, but for a wide rangeof purposes ranging from rice leather school satchels to rice eyeglass frames(items in the photo were manufactured at the Biomass Resin Fukushima Plant).

Loan Summary

In January 2023, a loan agreement was signed with KOBAORI’s subsidiary in Vietnam, HUARI (VIET NAM) PRINTING AND
PACKAGING COMPANY LIMITED, for a loan of JPY80 million (JBIC portion). Co-financed with Resona Bank, Ltd. Throughsupport for the manufacture and sales of biomass plastics, this contributes toward maintaining and improving the international competitiveness of Japanese industry.

FEBRUARY 2024

JBIC TODAY

11

JBIC History

1997

vol.5

Asian financial crisis exposed global financial fragility
JEXIM’s central role in Japan’s government support for the region

A financial crisis that started in Thailand in 1997 spread to other emerging markets.
At that time, JBIC’s predecessor, the Export-Import Bank of Japan (JEXIM), played a central role in Japan’s support for Asia.

Meeting between Finance
Minister MIYAZAWA
Kiichi and U.S. Treasury
Secretary Robert Rubinat the October 1998
IMF-World Bank Annual
Meetings. The New
Miyazawa Initiative wasannounced at the meetingof Asian finance ministers
and central bank governors held that samemonth.
Photo: Reuters/AFLO

Accelerating tradeand investment liberalizationand the East Asian economic miracle
Following the appreciation of the yenthat was triggered by the 1985 Plaza
Accord, Japan rapidly expanded its
foreign direct investment and became amajor overseas investor. A core elementof Japan’s outward investment strategy
was the establishment of production
networks and export bases in Southeast
Asian countries.
Trade and investment liberalization
further accelerated in the 1990s, with
the World Trade Organization (WTO)
established in 1995. Financial markets
became more globalized, and private
capital investment in developing countries surged. Asian countries posted
remarkable economic growth, andlarge amounts of highly liquid, shortterm capital investment flowed into theregion.
However, the Asian financial crisis
struck in 1997. The “miracle” economic
growth of Asian countries suffereda rude awakening. The backgroundto this was the fragility of the international financial system, which had
itself been weakened by economic andfinancial globalization. Most emerging
market economies had by then liberalized domestic and foreign capitaltransactions, and the fragility of theirbalance-of-payments structure was
exposed.

On July 2, 1997, the Thai government
shifted the baht from a dollar-peg toa managed floating exchange rate
system, and the currency plunged invalue. Speculative selling immediately
spread to neighboring ASEAN countries
and South Korea. A serious economiccrisis then swept over the countries ofAsia, even causing political and social
unrest. This crisis then spilled over to
Russia and Brazil in 1998, intensifying
global financial concerns. The contagion even reached Wall Street, leading
to the collapse of major U.S. hedge
fund LTCM.

As the financial crisis
continued to spread,the New Miyazawa Initiative
helped revive the regional economy
Japan’s government responded swiftly
to help Asian countries overcome theireconomic difficulties and stabilize international financial and capital markets
through an international framework
including the IMF and the World Bank,as well as with its own assistance.
Meanwhile, JEXIM put its resources
to work as part of the “New Miyazawa
Initiative,” a USD30 billion bilateralsupport program, the largest of its kindduring the crisis. JEXIM played a central
role in Japan's support for Asia, providing financial sector adjustment lendingin cooperation with the World Bank andother institutions; loans to government
financial institutions to support local

February 2024 Edition
Published by Press and External Affairs Division, Corporate Planning Department,
Corporate Planning Group, Japan Bank for International Cooperation
4-1, Ohtemachi 1- chome, Chiyoda-ku, Tokyo 100-8144, Japan Tel : +81-3-5218-3100*Any unauthorized reproduction or publication of the images or text in this paper is prohibited.

JBIC Website

Facebook

manufacturing industries (two-steploans); and capital assistance for infrastructure projects. Through provision of
ongoing support totaling JPY3.5 trillion
up to March 2000, JEXIM contributed
to the subsequent revitalization of East
Asia’s economy.
On October 1, 1999, JEXIM wasrestructured with the birth of the Japan
Bank for International Cooperation(the former JBIC) through the mergerof JEXIM and the Overseas Economic
Cooperation Fund (OECF). Until its
final day, JEXIM provided support forJapan’s policy challenge of navigating
the turbulent waters of financial globalization.

Expansion of the Asian financial crisis
and Japan’s support
1997 July
OctoberCurrency crisis in Thailand, thestart of the Asian financial crisis
Currency crisis in Indonesia

November Currency crisis in South Korea
1998 August

Financial crisis in Russia leads
to global financial concerns

September Collapse of U.S. hedge fund
LTCM
October
1999 October

Announcement of the New
Miyazawa Initiative
Export-Import Bank andOverseas Economic
Cooperation Fund (OECF) merge
to create the Japan Bank forInternational Cooperation(former JBIC)

InstagramThis printed material uses
vegetable oil ink, which
includes soybean oil ink.