Overview of theInvestment and Loan Plan
◆Business Areas and Fiscal 2006
Investment and Loan Plan
◆Features of the Fiscal 2006
Investment and Loan Plan

9

DBJ Disclosure 2006

Business Areas and Fiscal 2006 Investment and Loan Plan
In fiscal 2006, DBJ's activities focuses on the following three main areas:
1. Community development
2. Environmental conservation and sustainable societies
3. Creation of new technologies and industries
In order to promote investment in these areas, DBJ focuses on investment and loan activities, conducting
surveys and research and providing information in support of policy proposals and project formulation.
Community Development●Building a nationwide infrastructure including transportation, distribution, and information networks●Revitalizing local redevelopment projects and cities in each region using the Private Finance Initiative（PFI）and
Public and Private Sector Partnership（PPP）methods, as well as promoting infrastructure building from theperspectives of both large regions and individual communities●Promoting businesses that contribute to new employment, and industries that are characteristic of each region
Environmental Conservation and Sustainable Societies●Working toward a sustainable, recycling-oriented society by strengthening initiatives that promote
environmental protection and ensure energy security along with economic development●Actively addressing social welfare and disaster prevention as next-generation policy issues, creating a solid social
infrastructure, and ensuring a safe and secure livelihood for the people in the face of a declining birthrate and an
aging population

Business Areas and Fiscal 2006 Investment and Loan Plan

Business Areas and Fiscal 2006 Investment and Loan Plan

Creation of New Technologies and Industries●Promoting technology development as part of next-generation economic development and as a global social asset
with a huge carry-over effect to all social and lifestyle areas●Using advanced financing methods to stimulate economic growth through business and industrial
redevelopment

DBJ Disclosure 200610

Features of the Fiscal 2006 Investment and Loan Plan

Loans and Investments by Fiscal Year
（Billions of yen）
Fiscal year
Item

2003

2004

2005

（Reference）
Fiscal 2005
year-end balance

469.0

585.3

624.9

6,987.2

Revitalization of regional economies

106.3

210.9

258.4

1,420.8

Development of regional social infrastructure

170.7

157.3

155.5

1,985.9

Creation of a widespread network

191.9

217.0

210.8

3,580.4

254.6

237.2

240.2

4,016.7

Environmental protection, energy,
disaster prevention, and welfare measures

254.6

237.2

240.2

4,016.7

Creation of New Technologies and Industries

416.0

293.0

265.6

1,845.8

106.7

23.4

102.8

309.6

Community Development

Environmental Conservation and Sustainable Societies

Advanced technology and economic revitalization

309.3

269.5

162.8

1,536.1

1,139.7

1,115.6

1,130.8

12,849.7

43.3

32.3

12.6

511.6

Total

1,183.1

1,148.0

1,143.5

13,361.4（of which capital subscription）（61.6）（58.7）（55.8）（346.4）

15.4

23.3

70.1

161.6

Development of a socio-economic baseSub-total
Improvement of social capital

Debt guarantees

Notes: 1.Investment and loan categories were revised effective fiscal 2005. Investment and loan amounts in fiscal 2003 and 2004 were adjusted forconvenience to conform to fiscal 2005 categories.
2.Investment in funds is based on the agreement amount.
3.For fiscal 2003, the figures include ¥63.7 billion corresponding to the business activities of the former Hokkaido-Tohoku Development FinancePublic Corporation, ¥0.5 billion corresponding to the former lending business of the Japan Regional Development Corporation, and ¥11.5 billion
corresponding to the former lending business of the Japan Environment Corporation.
4.For fiscal 2004, the figures include ¥59.1 billion corresponding to the business activities of the former Hokkaido-Tohoku Development FinancePublic Corporation, and ¥16.6 billion corresponding to the former lending business of the Japan Environment Corporation.
5.For fiscal 2005, the figures include ¥67.4 billion corresponding to the business activities of the former Hokkaido-Tohoku Development FinancePublic Corporation, and ¥14.4 billion corresponding to the former lending business of the Japan Environment Corporation.
6.The fiscal 2005 year-end balance includes ¥35.9 billion in stock from the Tomakomai East Development Corporation and the Mutsu
Ogawara Development Corporation.

Features of the Fiscal 2006 Investment and Loan Plan
Fiscal 2006 Investment and Loan AmountIn keeping with the reform of special public
corporations, DBJ plans to invest or lend a total of（Reference）
Comparison of Fiscal 2006 Investment and Loan
Plan and Initial Amounts Planned in Recent Years

1,110.0 billion yen in fiscal 2006, which is 58.0 billion yen
less than in the initial plan determined in fiscal 2005.
These outlays are part of an effort to provide financing in（Billions of yen）
Comparison withfiscal 2000 plan

cooperation with private-sector financial institutions to

2000

2,230

areas critical to the achievement of national economic

2001

1,600

▲

2002

1,200

▲ 1,030

2003

1,178

▲ 1,052

2004

1,178

▲ 1,052

2005

1,168

▲ 1,062

2006

1,110

▲ 1,120and fiscal policies on regional economies, theenvironment, technology, and other issues.
Accordingly, the balance of loans is expected to
decline by about 5.8 trillion yen compared to the figure at
the time of DBJ's founding（from 18.8 trillion yen at
the end of March 2000 to an estimated 13.0 trillion
yen at the end of March 2007）.
11

Fiscal year

Initial amountplannedDBJ Disclosure 2006−
630

Measures addressing banks' reluctance to lend and additional compensation
Initial budget （excluding measures addressing banks' reluctance to lend）（millions of yen）

40,00035,00030,00025,00020,00015,00010,000
5,000
0

1989

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

（Fiscal year）【Streamlining and rationalization】
・Reduction in loan ratio
・Revisions to target areas
・Reduction in economy-boosting measures

Establishment of a system
for measures addressing
banks' reluctance to lend

Abolishment of previous two organizations
Establishment of new bank
（Areas eligible for loans restricted to three）

Facilitating Use of Market for Fund Procurement
The capital that DBJ raised in the market through the Fiscal Investment and Loan Program（FILP）by issuing FILP
agency bonds and government guaranteed bonds decreased by 93.6 billion yen compared to the initial fiscal
2005 plan to 754.4 billion yen. In accordance with the Basic Policies on Policy-based Financing Reform, DBJ will
increase the proportion of capital raised through bond issuance（ government guaranteed bonds and FILP
agency bonds）, in light of the potential for raising capital in the market. DBJ plans to issue 240 billion yen in FILP

Features of the Fiscal 2006 Investment and Loan Plan

Budget Trends （based on total for former two organizations）

agency bonds, as in fiscal 2005.

Activities in Three Priority Areas and Addressing Critical Areas
In light of economic and financial policies developed by the government of Japan, DBJ will continue to focus on
activities in our three priority areas of community development, environmental conservation, and technology. At the sametime, however, DBJ will also address critical issues such as disaster prevention measures and the asbestos problem. In
developing its response, DBJ will capitalize on its key strengths - impartiality, reliability, longevity, expertise,
networks, and ability to fund risky projects - and strive to energize the financial market by creating and popularizing new
financing methods and economic value.

Addressing Critical Issues●Efforts to Prevent or Reduce Damage from Natural Disasters
DBJ has created a Loan Program for Promoting Disaster Management based on the Central Disaster
Management Council's self-evaluation indicators of the corporate disaster management, and is committed todeveloping new risk financing methods for projects such as contingent financing in the event of an earthquake.
●Resolving the Asbestos Problem
DBJ has developed a program to support replacement of asbestos with alternative materials in buildings andfactories.
Contributing to Community Revitalization●DBJ has augmented our support for projects consistent with community revitalization plans devised by local
authorities.
●DBJ will continue to be actively involved with PFI and PPP, and will also add projects for privatizing public
enterprises to the list of projects eligible for Loans for the Promotion of the Privatization of Public Enterprises. This
is in line with the reform to realize a streamlined and efficient government.
DBJ Disclosure 2006

12

Features of the Fiscal 2006 Investment and Loan Plan

Resolving Environmental Problems
Strengthening efforts to achieve the objectives of the Kyoto Protocol●Equipment and facilities with low CO2 emissions were added as eligible loan targets in an effort to promote "network
enlargement measures" that will enhance efforts to achieve the Kyoto Protocol objectives.
●The program for residential-use photovoltaic generators was augmented to encourage households in reducing theemission of greenhouse gases.
●DBJ created a loan program for nuclear waste at interim storage facilities to promote the implementation of thenuclear fuel cycle.
Promoting the Creation of Technology and New Industries●DBJ increased our support for the development of technology contributing to a safe and reliable society and technology
essential to the nation. The government's Third Science and Technology Basic Plan identifies these as priority areas.
●DBJ will continue our efforts to create and revitalize new industries based on the New Industry Promotion
Strategy of the Ministry of Economy, Trade and Industry. We will encourage the further development andutilization of intellectual assets.
Active Use of New Financing Techniques●DBJ will encourage more active use of financial and capital markets through the securitization business ofprivate financial institutions and securities companies, and will introduce a warehousing function for project financing
to reinforce our ability to arrange new financial schemes.
●DBJ contributes to the development of new financial techniques, to help develop high-quality projects andvitalize the financial market. In addition, DBJ will strengthen our equity financing programs to provide valuable
financing for projects that face risks.

Fiscal 2006 Investment and Loan Plans, and Examples of Target Businesses in Each Field（Billions of yen）

Community Development

Initial amount
521.0

Chief loan targets（examples）

Revitalization of regional economies

140.0

Regional revitalization, strengthening of regional competitiveness,encouragement of cold-winter region business activities, employment promotion,
support for community renewal based on local character, promotion of tourism

Development of regional social infrastructure

130.0

Urban renaissance program, improvement of social capital using Private
Finance Initiative's （PFI）, promotion of the privatization of public enterprises,
redevelopment of urban area

Creation of a widespread network

251.0

Construction of core transportation networks, air transport systems, informationand telecommunication networks

Environmental Conservation and Sustainable Societies

2,965
Promotion of environmentally friendly management using environmental ratings,
promotion of stronger disaster prevention measures via disaster prevention
ratings, promotion of businesses utilizing the Kyoto Protocol mechanisms,
energy and security measures, development of new energy sources, urban flood
control businesses

Environmental protection, energy,
disaster prevention, and welfare measures

296.5

Creation of New Technologies and Industries
Advanced technology and economic revitalization

280.0
70.0

New technology development, new industry creation and revitalization

210.0

Business and industry rehabilitation, facilitation of easy access to Japan, support
for security measures, promotion of the spread of financing for risk management

Development of a socio-economic baseSub-total
Promotion of social capital creation
Total
Procurement
Fiscal Loan Fund（FILP borrowing segment）（Government-guaranteed domestic bond segment）（Government-guaranteed overseas bond segment）
Self financing（FILP agency bond segment）

1,097.5
12.5
1,110.0
754.4（374.4）（190.0）（190.0）355.6（240.0）Note: The initial fiscal 2006 plan includes the following business activities-¥114.4 billion for the former Hokkaido-Tohoku Development Finance Public
Corporation, ¥8.9 billion for the former lending business of the Japan Regional Development Corporation, and ¥6.7 billion for the former lending
business of the Japan Environment Corporation.
13

DBJ Disclosure 2006

Contributing to the
Future of Japan
DBJ provides both financial and knowledge-based
solutions to support development that will makelife brighter and more rewarding for today s
citizens and their children.

Introduction of Finance Projects◆Community Development

Contributing to the revitalization of local economies by joining regions
in supporting solutions that draw on the advantages of each area

◆Environmental Conservationand Sustainable Societies

Helping to realize a sustainable, safe and secure society by supporting
businesses that are committed to social responsibility◆Creation of
New Technologies and Industries

Stimulating the Japanese economy by utilizing knowledge andinnovative financial methods to create new industries that will be
the source of future prosperity

DBJ Disclosure 2006

14

Community Development

Business Revitalization for Local Companies
Niigata Tekkosho Co., Ltd.
Even local companies with sophisticated technology andexpertise may be forced to file for corporate reorganization
when confronted with deteriorating economic conditions.
To aid companies faced with these challenges, DBJ
applies its knowledge of structured financing. Through DIP
finance, M&A, and business revitalization funds, DBJ cansustain technology and employment within such local
companies. This comprehensive support scheme serves
as a model for business reorganization throughout Japan.

Project Financing for PFI Projects
Chiba City Omiya School Meal Service Center: Development and Operation
The private finance initiative（PFI）method of financing utilizes
private-sector competence in constructing, maintaining,and operating public facilities. The use of PFI reducesbusiness costs for the government and local publicorganizations, and provides higher-quality public services.
DBJ has introduced this method to Japan, and drawing on
experiencewithwide-ranging

networks

betweentheprivate - and public sectors as well as know-how on
structured financing, the Bank has supported an extensive
variety of PFI projects. For example, DBJ and Chiba Bank
served as joint lead managers in a PFI project for a school
meal service center contracted by the city. Keiyo Bank
also participated in the project. The project, benefitingfrom the private sector's expertise in food sanitation,
resulted in an appetizing and safe school meal service.

15

DBJ Disclosure 2006

MUZA Kawasaki Project
Urban revitalization requires financial solutions that allow
risk to be controlled. In one such example, DBJ structured
non-recourse financing to fund the construction of a multi-use
facility in the redevelopment of the west entrance ofCommunity Development

New Efforts to Establish Urban Redevelopment Funds

Kawasaki Station. DBJ established an urban revitalization
fund, and in cooperation with local banks, provided
financing for the riskier subordinated debt portion（mezzanine or "middle risk funds"）. From its neutral standpoint,
DBJ will continue using this method of finance to galvanize
middle risk markets and for further revitalization of urban
areas.

Advice on Local M&A
Yasufuku Rubber Industries Co., Ltd.
M&As are important tools in raising the business value of
local medium-sized companies facing further globalization,

Background of Project Formation and Significance（Schematic Diagram）

heightened competition, and a shortage of successors. To
assist Yasufuku Rubber Industries with the acquisition ofanother local company's non-core business, DBJ worked
as advisory with the San-in Godo Bank Ltd. This type of
project extends across several regions, making DBJ's
Regional Bank M&A Network, which is used in areas
where corporate information is unevenly distributed or
specialized services are inadequate, particularly effective.
DBJ plans to use diverse financing methods such as M&A to
enhance the region-based relationship banking functionsof local financial institutions.

Yasufuku Rubber
Industries（buyer）
Expansion ofindustrial-use rubber businessFuji Kiko（seller）

Priority
areas

Acquisition ofMarusei Rubber Industries,
trading area,and human resources
Maintenance of site
in Hamamatsu,
Shizuoka Prefecture
Development ofcooperative relationshipwith a client（Fuji Kiko）

Selection of priority
business areas in which tofocus resources
Effective use ofmanagement resources
by selling business

Significanceof the deal

Building of cooperative
relationships with
manufacturers specializing
in prime rubber

Creation of win-win relationships

DBJ Disclosure 2006

16

Environmental Conservation and Sustainable Societies

Multi-Level Support for Environment-Friendly Management of Distributor
Nippon Express Co., Ltd.
DBJ offers a wide array of financial options to support
companies that adopt environmental conservation measures.
DBJ offers two environmental loan programs. The Loan Programfor Promotion of Environmentally Conscious Management
comprehensively evaluates a company's environmental protection
measures according to a score sheet developed by DBJ. The
program awards preferential loan rates based on theenvironmental rating. The second program, the Loan Program for
Promotion of Plans to Achieve Kyoto Protocol Objectives,
grants preferential loan rates to projects that are effective in
reducing greenhouse gases. Nippon Express, a leading company in
the Japanese distribution business, was the first to qualify. DBJ
recognized the company for its pursuit of environmental
management, as well as its measures to reduce global
warming. The good example set by Nippon Express is
expected to serve as a model for the entire industry.

Programs to Promote Global Warming Reduction Measures
Establishment of Japan GHG Reduction Fund and Japan Carbon Finance Ltd.
To reduce greenhouse gas（GHG）emissions, DBJ has

Japan, a country with limited capacity for reducing

established the Japan GHG Reduction Fund（JGRF）with thegreenhouse gas emissions, utilizing the Kyoto Mechanism

Japan Bank for International Cooperation（JBIC）, andcan be a cost-effective solution, while at the same time

various other private Japanese companys. JGRF is thecontributing to the sustainable development of developing

first greenhouse gas reduction fund in Asia that uses thecountries. DBJ remains committed to this project by taking full

Kyoto Mechanism to purchase credits for emission rights

advantage of its network of overseas development financeearned in developing nations' greenhouse gas reduction

organizations, as well as its expertise in environmental

projects for distribution among the fund's investors. For

measures and fund operations.

Overview of Japan GHG Reduction Fund and Japan Carbon Finance

CDM/JI
project

Contract for
credit purchaseenvironmental
measures projectin host country

Acquisition
costs

（

）

CreditPurchase

JCF（

Resale Contract）

Japan Carbon
Finance Ltd.

（

Resale costs

Credit resale

JGRF
voluntary
partnership）Managing
partner,（

Equity partner（private companies）

Capital injection
contract

Capitalinjection（call）＄141,500,000）

Development
Bank of Japan●Project funding using both bank's networks●Collaboration with international organizations and development finance organizations●LoansCreditDBJ
JBIC※CDM/JI projects：Clean Development Mechanism（CDM）and Joint Implementation（JI）, measures to prevent global warming based on the Kyoto Protocol

17

DBJ Disclosure 2006

Yasuda Warehouse Co., Ltd.
The Loan Program for Promoting Disaster Management

Before reconstruction.

evaluates a company's disaster readiness using DBJ's
own rating system. The system is based on the Central
During reconstruction.

Disaster Management Council's Self-Evaluation Indicators of
the Corporate Disaster Management. Companies withparticularly impressive measures receive preferential loan
rates. Yasuda Warehouse was the first to receive a loan
through this program, and was chosen for its impressive
disaster prevention system. Their system is based on adisasterprevention

committee

runningacrossalldepartments. The loan was granted to Yasuda Warehouse toback up the company's information system and rebuild an
outdated warehouse. Yasuda Warehouse is currently
establishing a business continuity plan（ BCP）, and DBJ
expects this to become a leading example in the
Image of completed building.

distribution industry.

Environmental Conservation and Sustainable Societies

Creation of the World's First Loan Program Using Disaster Prevention Ratings

Loan Program for Promoting Disaster Management
Company

Businesses eligible for loans :measures assessed in disaster readiness evaluations● Planning and management（preparing BCP, etc.）● Preparations to help facilities to reduce the effects of a disaster（earthquake resistance diagnoses, repairs, etc.）● Life support measures（measures to prevent secondary damage）● Back-up systems（information systems, etc.）New
efforts

to 50% of the（costUpof theeligible project）

Loan

DBJ
Key areas addressed in requisite and basic measures on the
self-evaluation indicators（in addition to items 1 through 4, item 5 or 6 must be satisfied）① Disaster management plans based on emergency response② Life support measures③ Building-safety measures and verification of facilities' disaster readiness④ Education and training⑤ Measures to prevent secondary damage in surrounding areas⑥ System for checks and revisions
Companies will not be eligible for loans if these conditions are not met

Current
disasterprevention
measuresAcceptance

Measuresqualifying as"excellent"qualify forpolicy rateⅠ

Acceptance

Key areas addressed in basic and recommended measures on
self-evaluation indicators（four or more items below must be satisfied）⑦Business continuity plan（BCP）⑧Measures taken to reduce impact of disasters on facilities,
such as quake-resistant buildings⑨Back-up system for important operations⑩Local affiliations⑪Disaster prevention measures across supply chain⑫Information disclosure and contribution to the community

Acceptance

Measuresqualifying as"superior"qualify forpolicy rate Ⅱ

Independent evaluation system according to the self-evaluation
indicators of the Corporate Disaster Management

Central Disaster Management
Council（Cabinet Office）

Self-evaluation indicators of the
Corporate Disaster Management

DBJ Disclosure 2006

18

Environmental Conservation and Sustainable Societies

Project to Build a Nuclear Fuel Cycle
Japan Nuclear Fuel Limited

Spent fuel storage facilities are responsible for ensuring

Japan's energy policy. The project requires massive

Japan'soffacilities, calling for large amounts of capital and a longradioactive waste and the nuclear fuel cycle, and curbing

construction period. DBJ has assisted in promoting thegreenhouse gas emissions. They play an essential role inproject through a steady supply of long-term loans.

energysecurity,

Uranium minemanaging

thedisposalSmelting plant

Conversion plant

Uranium ore

Uranium
hexafluoride

Reuse（recovered uranium）
Final undergroundrepository site

Uranium hexafluoride
Reconversion
plant

MOX fuel plant
Reuse
recovered uranium
and plutonium（
RadioactivewasteHigh-Level Radioactive
Waste Storage andManagement Center

Uraniumenrichment
plant

Spent fuel）Reprocessing
Uranium dioxide
plant（depleted uranium）

MOX fuel

Uranium dioxide
Molding andprocessing plant

Interim storage
facility

Nuclearpower plant

Fuel bundle

Spent fuelLow-level Radioactive
Waste Storage andManagement Center

Radioactive waste

DBJ addresses energy security measures （main loans for related projects）【Resource development and maintenance of supply functions】
Offshore extraction of oil and natural gas, development of oil and LPG storage functions【Nuclear power development】
Nuclear power generation facilities, spent nuclear fuel reprocessing plant【Global environmental measures】
Thermal-, wind-, and solar-power generation facilities; fuel cell facilities; biomass energy facilities; liquid gas generation sites; promotion of natural gas
19

DBJ Disclosure 2006

DBJ's Practical Application Support Center for Technology
Fostering technology is an important aim for DBJ. Working

companies. Taking advantage of its networks of technology,

in affiliation with regional financial institutions, the Bank has

specialists, and client companies, as well as its expertise inopenedforbusiness evaluation and finance, the Center evaluates

Technology at its headquarters, the Kansai branch, and theaPractical

Application

SupportCentertechnology-related business plans and provides consulting.

Tohoku branch. The Center supports commercial application or

By fiscal 2005, the Center carried out a total of 53 studies andtechnological development results within medium-sized

provided feedback to companies in 49 cases.

Overview of the Practical Application Support Center for Technology
Medium-sized companies attempting
to develop practical applications
for technology

Loanconsultations

Regional financial
institutions'
technology network
RequestEvaluation of plans for developing practicalapplications for technology

DBJ's network●Independent network of technology advisers●Network of client companies nationwide●Networks with government, communities,
and universities●Market trend surveys ●Technology trend surveys

DBJ
Practical Application
Support Center
for Technology

DBJ's expertise
Consulting on developing practicalapplications for technology●Marketing strategies, support in establishing marketing plans●Consultation on fund-raising

Screening knowledge●Loans for new technology development●Loans for venture companies
Financial expertise●Loans secured by intellectual property rights●Loans with new share options●Equity investments, M&A

Start of Manufacturing Management IndexTM

Case Study of Minato Genki Fund

Assessment

DBJ has invested and collaborated with the Minato
for

Genki Fund structured by the Kobe based Minato

Technology strengthened its support of technology

Bank Ltd. Group to assist local companies founded

management within companies by introducing theafter the Great Hanshin-Awaji Earthquake,

Manufacturing Management IndexTM in June 2006.

Practical Application Support Center for Technology

The Index identifies the strengths and weaknesses inscreened

a company's capacity to administer technology

businesses in cooperation with the New Industry- the driving force behind a manufacturer's potential for

Research Organization（NIRO）and Kobe University.

growth - and makes a quantitative assessment. This

DBJ also provided support such as management

reveals a company's potential in a way that is not

guidance and fund-raising after the investment.

The

Practical

Creation of New Technologies and Industries

Support for Technology Development

Application

SupportCenterpotential

investments

and

The

evaluated

evident through financial indicators. The Index alsoenables an objective assessment of whether or not acompany is effectively utilizing its own technicalstrengths, and how it can optimize these strengths
through comparison with its peers. Through thisconcept, DBJ helps formulate strategic technology
management plans.
DBJ Disclosure 2006

20

Creation of New Technologies and Industries

Growing Sophistication of Regional Medical Technology
ODIC CO.,Ltd.
Supporting the development of new industry in the
medical and welfare field is extremely important, not only toenergize the economy, but also to address the needs ofJapan's aging society. Aiming to enhance the sophistication of
local medicine, DBJ donated cutting-edge positron emission
tomography（PET）equipment for the early detection ofcancer to local medical institutions such as Okayama
University Hospital, on the condition that the equipment isshared with other local medical institutions. This is the firstsuch example in Japan. DBJ arranged syndicate loans
with local financial institutions, using its neutral standpoint tohelp the financing of the new business.

Hands-on Investment in Local Venture Companies
Kyushu IT and Semiconductor Investment Limited Partnership
Fostering venture companies requires not only capital, but

created through collaborations between industry, universities,

also practical support including management guidance

and the government on a nationwide and global scale, with（incubation）. The hands-on venture fund establishedthe objective of revitalizing local economies. DBJ provided

between Kyushu business circles and Fukuoka Prefecture,expertise from a neutral standpoint when working withbased in Kyushu where much of Japan's IT andfund manager Kyushu Venture Partners to set up the fund.

semiconductor industry is concentrated, aims to nurture

Utilizing its national and global networks, DBJ invests innew business ideas formed at universities and companies

the fund along with local companies.

both within and outside the region. New businesses are

Investment Limited Partnership
LP＝
Limited partnership
Stakeholder

GP＝General partner,

Equity participation

Kyushu Venture Partners

Management ofequity participation

Stakeholder
Investment

Limited（Investment）
Partnership

Sales price and dividends

21

DBJ Disclosure 2006

Venture B
Venture C

Stakeholder

（

）

IPO
Venture A

Fund
Stakeholder

Support tofoster businesses

Raising corporate
value of invested
companies

Initial public
offering

（

）

M&A

Anime Innovation TokyoJapan is known throughout the world for animation andvideo, and growth in the Japanese content industry is
expected to have a trickle-down effect on other industries
such as tourism. However, entertainment projects areusually high risk, making them difficult to finance throughregular bank loans. To support animators and the Japanese
animation industry at large, DBJ has joined forces with theTokyo Metropolitan Government in a pilot project that funds
world class high-quality productions through limited liability
partnerships（LLP）.

DBJ Disclosure 2006

Creation of New Technologies and Industries

Support for Media Content Industry

22

FDI in Japan

Promoting Foreign Direct Investment in Japan and Globalization ofJapan's Regional Economies
Foreign capital investment in Japan not only facilitates the exchange of cutting-edge technology and knowledge creating jobs and vitalizing the Japanese economy - but also helps develop Japan's regional economies.
DBJ's Department for International Affairs as well as our overseas representative offices, support inward
investments that bring the benefits of globalization to Japan's regional economies. This is done in a variety of ways
such as: information provided through seminars and in reports issued by our overseas offices; consulting
services for corporate investment plans; and alliances with regional public institutions and organizations such as
JETRO.

Promotion of inward investment andglobalization of Japan's regional economies
Providing information

Consulting

Support・ Information on locations and markets

・ Advice on investment plans

・ Referral of partners

・ Seminars and lectures

・ Provision of expertise・ Alliances with regional public organizations

・ Reports by overseas representative offices

・ Alliances with organizations involved withinvestment in Japan・ Referral to precedent cases

Case study ①：Business Transfer and Business Expansion through M&As
Inergy Automotive Systems K.K. is the Japanese branch of
French Inergy Automotive Systems SA, a joint venture
between French Plastic Omnium and Belgian Solvay SA.
The company was established with Inergy's acquisitionof the plastic fuel tank（PFT）business of Nissan MotorCo., Ltd. Automobile manufacturers are increasingly
turning to PFTs because they enable flexible molds,
reduce the chances of explosion in the event of a fire,
have

high

impactendurance,

andimprovefuelefficiency. DBJ helped finance the construction of the
new Kita Kyushu City factory as well as the business
transfer.

DBJ's Perspective
This project resulted in a full-scale introduction of
PFTs which have superior features compared tosteel tanks to the Japanese market. The project
also

made

efficient

use

of

the

Japanese

automobile companies' manufacturing lines andfacilitated its financial restructuring efforts.

23

DBJ Disclosure 2006

FDI in Japan

Case study ②：
Support for Start-up of Japanese Branch

Case study ③：Founding of Engineering Center

Shanghai Newtouch Software Company, Ltd., is a

Greene,private Chinese company established in Shanghai in

manufactures rubber and plastic sealants that prevent

1994. Focusing on outsourcing work in software

toxic and high-temperature fluids and vapors fromdevelopment for companies in Japan and otherleaking. Their products are used in semiconductor

foreigncountries,

Shanghai

Newtouch

Tweed

Group

is

a

US

companythat

Softwaremanufacturing equipment, aircrafts, oil rigs, and fluid

Company also provides IT solutions for Chinese

treatments. The products are considered exceptionallycompanies in China and abroad. The company has

safe, meaning the sealants perform well over a longgrown rapidly, setting up Japanese branches in Tokyo

period in highly toxic situations. The sealants can be

and Kobe to build closer relationships with clients andexpected to enhance efficiency by reducing productrespond more quickly to client needs. DBJ provided

replacement

the funding needed to launch the Japanese branches,maintenance costs. DBJ provided aid for Greene,

covering the deposit on their office lease and software

Tweed

development costs.

Kumamoto Prefecture.

tofrequency
build

a

and

new

to

decreaseengineeringuser

centerin

DBJ's Perspective
DBJ's Perspective

The project ensured that clients in East Asia's

Many foreign companies wishing to establish

fast-growing market for semiconductors would

branches in Japan have a hard time raising initialreceive urgent services such as product analyses

start-up funds due to insufficient credit andand causal analyses. Kumamoto Prefecture iscollateral within Japan. Furthermore, language

striving to boost its international competitiveness,barriers and cultural differences often lead toparticularlyinsemiconductor

manufacturingcommunication problems. By providing officetechnology,

and

DBJ

felt

projectlease deposits and R&D funds, DBJ actively

consistent

with

the

prefecture's

facilitates start-ups by foreign companies.

revitalization plan.

①
②

this

was

regional③

DBJ Disclosure 200624

International Cooperation Activities

International Cooperation Activities
Significance of International Cooperation

Fiscal 2005 Activities

People in developing countries, particularly in Asia,

The Bank held lectures and workshops on topics

are becoming aware of the importance of soundpertaining to small and medium enterprise promotion andpolicy-based financing and development financing in

the creation of new businesses; common issues foraddressing economic development challenges thatthe ten countries in Asia, Latin America, and Eastern

are not adequately met by private-sector finance.

Europe participating in the training program on

Official development assistance organizations, related

development finance.

government agencies, and international development

DBJ also provided training programs for Cambodia,

finance organizations all ask DBJ for intellectual

Laos, Myanmar, Vietnam, Kazakhstan, Uzbekistan,cooperation. DBJ draws on our experience, knowledge,

and Mongolia, which are all transitioning to a market

and the domestic networks we have built in assisting

economic system. Participants working in the financeJapan's economic growth to answer these needs. DBJ

sector attended lectures on DBJ's operations andhas held an annual Developmental Finance Course in

essential financial practices such as risk management,

Tokyo since 1967, inviting development financeand also discussed development financing methods

organizations from South Korea, China, the Association ofsuited to their country's conditions.

Southeast Asian Nations（ASEAN）, Latin America,

In addition, DBJ conducted surveys in cooperation with

Africa, and Eastern Europe. As part of our knowledge

numerous development assistance institutions andcreation capacity, DBJ bases our international

government agencies. The research included a study oncooperation on high-quality training courses, surveys,

industrial revitalization in regions along the borders ofand other programs that serve recipients while

Thailand and Laos, and the possibility of industrial

enhancing Japan's presence in the international

affiliations between these two countries. Further

community.

research was done on human resource development
related to China's intellectual property, as well as aid for
The Cambodia Garment Training Center. DBJ also
provided advice on previous aid evaluations andfuture efforts.

Training in development finance: Discussing risk management for financial institutions.

25

DBJ Disclosure 2006

Optimal Operations
Management Framework◆Operations Management Cycle◆Internal Management System◆Disclosure◆Corporate Social Responsibility（CSR）
Activities

DBJ Disclosure 2006

26

Operations Management Cycle

Plan Preparation and publication of Investment and Finance
Guidelines based on the Medium-Term Policy Principles
Do
Execution of investments and loans
See External evaluation: Management Council
Internal evaluation: Operations evaluation
DBJ strives for optimal operations management within the Plan, Do, See
cycle outlined below. The Bank works to manage the various risks
associated with being a financial institution and to earn and keep thetrust of the general public.

Operations Management Cycle
Preparation and Publication of Investment and Finance Guidelines Based on the Medium-Term Policy Principles
DBJ carries out its activities in accordance with three-year policies prepared by the competent ministers（ theMedium-Term Policy Principles）, and prepares and publishes Investment and Finance Guidelines for each fiscal
year.

Management Council
The Management Council is comprised of outside
experts, assembled in compliance with Article 24 ofOperations Management Cycle Based on the DBJ Law

Society

Pl a nthe Development Bank of Japan Law. Council

Competent Ministers

members examine the status of operations in relation toMedium-Term Policy Principles（every three years）

items stated in the Bank's Medium-Term Policy

Publication

Principles. The results of the examination are thenpublished to enhance DBJ's transparency.

Reviews and reports on
implementation ofMedium-Term Policy Principles

Investment and
Finance Guidelines（annual）

Evaluation results
reflected in Investment
and Finance Guidelines（annual）

DBJ
Management
Council
Operations
evaluation andinternal evaluation

External
evaluation

See

27

DBJ Disclosure 2006

Execution of
investments
and loansDoMembership:
Appointment:

Maximum of eight members
Scholars and experts, appointed by the DBJ Governor and subject to approval by the
Minister of FinanceTerm of office:

Four years

Chair:

Designated by the Governor; presides over council affairs

Management Councilors（as of end of June 2006）（◎ indicates the Chairman）
Yoichi Kaya

Director General, Research Institute of Innovative Technology for the Earth（RITE）

Satoru Kishi

Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Yoshio Matsui

Chairman, The Yomiuri Shimbun

Shigeru Morichi

Professor, National Graduate Institute for Policy Studies

Yasuko Niimura

Advisor, Niimura Law Office

Shinobu Shimizu

Chairman of the Board and Representative Director, Tokyu Corp.;

Yasuo Shingu

Honorary Chairman, Sumitomo Metal Industries, Ltd.;

Operations Management Cycle

Management Council Profile

Former Chairman, The Association of Japanese Private Railways
Former Chairman of the Board of Directors, Kansai Economic Federation◎ Shoichiro Toyoda Honorary Chairman and Director, Toyota Motor Corp.; Honorary Chairman, Nippon Keidanren
Report of the Management Council of the Development Bank of Japan（December 2005）
In accordance with Article 24 of the Development Bank of Japan Law, the Management
Council has prepared a report on the implementation status of the current Medium-Term Policy Principles. DBJ
passed this report on to the competent ministers.

Operations Evaluation
As with national and local public bodies, DBJ is required to undertake proactive reform to ensure accountability andimprove operations management. To achieve this, an operations evaluation system has been introduced.

Mechanism for Evaluating Operations
DBJ conducts its operations in line with the Medium-Term Policy Principles formulated by the competent
ministers. The law stipulates that the Management Council discuss the realization and status of these policies. For
this framework to work effectively, DBJ must evaluate its own operations and maintain an internal evaluation
mechanism that can provide the Management Council with the information needed for deliberations. The
operations evaluation mechanism assesses individual investment and loan proposals as well as the internal
investment and loan system, and reports the results to the Management Council. This information is also useful to
DBJ in reviewing its own operations（please refer to the left figure, "Operations Management Cycle Based on the
DBJ Law"）.
Specifically, the procedure consists of the following steps:（ 1）evaluation of individual investment and loan
projects, i.e., an assessment of the policy significance of individual proposals;（2）
evaluation of the investment and loansystem, i.e., an assessment of its effectiveness;（3）
evaluation of projects, i.e., a detailed evaluation of specificproposals; and（4）compilation of the results in a comprehensive Operations Evaluation Report, and release of the report
after notifying the Management Council（please refer to the bottom figure, "Evaluation System"）.
To ensure an optimal evaluation system, DBJ has established the Operations Evaluation Office. The goal is toascertain that internal evaluations generate accurate results. An additional committee of scholars and experts has
been established to provide suggestions on improving the system.

DBJ Disclosure 200628

Internal Management System

Evaluation System
Management Council

External evaluation

Reporting
Finance Planning &Coordination Department
Overall evaluation

Internal evaluation

Summary of the evaluation results obtained, as described below

Operations Evaluation
OfficeSupervisory departments（Note）

Re-evaluation

Investment and loan system evaluation

Individual project evaluation,plus checking of balance andlogical consistency with theinvestment and loan system

Compilation of individual project
evaluations for each investment
and loan system, and application ofthese to the systems' improvement

Operations Evaluation
OfficeInvestment and loan offices

Project evaluation

Individual project evaluation

Detailed evaluation for projects withdiverse policy results, where DBJ plays
various roles.

Evaluation of individual target businesses for investment and loans
Preliminary evaluation : Investment and loan stage
Follow-up evaluation : After the start of operation andmanagement of the target business

Finance Planning &Coordination Department, etc.
Evaluation of
Financial Soundness：Sections performing internal evaluations within DBJ
Note：Supervisory departments: Sections that are in charge of drafting policies and plans for investment and loans for each investment and loan system. For
example, the Department for Urban Development is the supervisory department for the investment and loan system dealing with urban development.

Factors Evaluated・Policy aspects of target business：Whether or not the target business for an investment and loan can actually realize the policy objectives; what kindof validity it has for the people of Japan and local residents; and what level of results can be achieved
・Role of investment and loans：Whether DBJ investment and loans continue to be based on the principles of supplementing and encouraging private
sector investments, and what kind of role they play at the time of a target business's implementation

Internal Management System
The DBJ budget is submitted to the Japanese Diet for approval each year. Diet approval is also required for the
Bank's financial statements. Overall operations are reviewed by the Board of Audit, the Ministry of Finance, and the
Financial Services Agency. Under the DBJ Law, the executive serving as auditor monitors operations, and theorganization-wide measures described below are applied to internal management.

Legal Compliance System
DBJ regards the legal compliance system as an essential component of management in fulfilling the Bank's
social missions and responsibilities as a policy-based financial institution. The Bank is currently undertaking
organization-wide efforts as described below.
Development of a compliance system
DBJ has established a General Risk Management Committee to reflect on legal compliance matters, determine theextent of compliance, and discuss improvements to the Bank's internal system. In addition, all departments of eachindividual branch have compliance officers responsible for verifying their section's legal compliance, reporting on
compliance-related matters, and serving as liaisons.
Internal dissemination of compliance information
DBJ has prepared a Compliance Manual, which contains specific behavioral guidelines that ensure legal compliance. The
manual includes related laws and regulations and is distributed to all executives and employees. To thoroughly
educate all executives and employees on basic legal matters, the Bank also holds training seminars and briefings.
29

DBJ Disclosure 2006

DBJ formulates detailed compliance programs for each fiscal year. After discussion in the General Risk
Management Committee the "action plans" are officially approved by the Governor.

ALM※ and Risk Management System
In order to ensure appropriate management of individual risk categories, DBJ has developed an asset/liability andrisk management system that clarifies which department is responsible for each type of risk. The Finance
Planning & Coordination Department oversees comprehensive asset/liability and risk management activities.
The ALM Committee, consisting of executives and the DBJ Governor, determines basic policies related tocomprehensive asset/liability and risk management, and conducts regular monitoring for each type of risk.

Internal Management System

Formulation of compliance programs※ALM（Asset Liability Management）
Financial institutions manage their assets and liabilities in an integrated manner, and also control the risk posed by these assets and liabilities.

Credit risk
Credit risk refers to the potential for losses due to decline or complete loss in asset value because ofdeterioration in the financial condition of the borrower. Credit risk management requires credit management of
individual loans as well as bank-wide portfolio management.
●Credit administration of individual loans
When making an investment or administering a loan, DBJ examines the primary entity's project viability andprofitability from a fair and neutral standpoint, and applies an internal rating system. DBJ is not subject to the Banking
Law or the Law Concerning Emergency Measures for the Revitalization of the Functions of the Financial
System（ Financial Revitalization Law）, but carries out independent asset evaluations in line with the SelfAssessment Criteria based on the Financial Services Agency's Financial Inspection Manual. The results ofinternal rating assessments and self-assessments are subject to auditing in accordance with the Practical
Guidelines for Verifying Internal Regulations Covering the Self-Assessment of Assets by Banks and Other
Financial Institutions and for Auditing Bad Debt Write-offs and Bad Debt Reserves（ Fourth Report of theSpecial Committee on Bank Auditing of the Japanese Institute of Certified Public Accountants）. The results are also
reported to the ALM Committee and used to monitor borrowers in accordance with their credit risk and credit amount.
●Portfolio management
DBJ performs a comprehensive analysis of data used in internal ratings and self-assessment such as loan defaults, andcalculates the loan portfolio's overall exposure to credit risk. Credit risk exposure can be classified as expected loss（EL）,
the average loss expected during a specific loan period, and unexpected loss（UL）, the maximum loss that could incurat a certain rate of probability. The EL and UL calculations are reported to the ALM committee. Monitoring andconsideration of countermeasures allows DBJ to control risk and devise effective measures to improve risk return.
Market risk
Market risk can be broadly classified into interest rate risk and exchange risk. DBJ takes the steps described below
to control market risk.
●Interest rate risk
Interest rate risk refers to the threat of fluctuations in interest rates, which can reduce the economic value of DBJ's
assets or interest income. DBJ calculates and analyzes risk exposure with cash flow ladder analyses（gapanalysis）, value at risk（VaR）, interest rate sensitivity analyses（basis point value）, and other methods. A
portion of the interest rate risk associated with lending operations is covered through interest rate swaps,
which are used solely for hedging purposes. DBJ does not have any trading-related risk because it does not engage
in trading（specified transactions）.
DBJ Disclosure 200630

Internal Management System●Exchange risk
Exchange risk entails the possibility of a decline in the economic value of DBJ's assets due to the impact ofchanges in currency exchange rates. DBJ's exchange risk derives from issuing foreign currency bonds and theextension of foreign currency loans. DBJ uses currency swaps to hedge this risk. The Bank manages
counterparty risk in swap transactions, the risk that the counterpart in the swap transaction will be unable to fulfill
its obligations, by continually monitoring the creditworthiness of all parties, and by diversifying transactions among
several institutions.

Asset / Liability and Risk Management System
Audit and Inspection
Auditors

Governor

Board of Directors

Operations Audit
Committee
Internal Audit andInspection Department

ALM Committee

Finance Planning &Coordination Department
Credit Analysis
Department

Treasury Department

Investment and Loan Departments and Branches

Liquidity risk
As its main method of acquiring funds, DBJ relies on the stable procurement of long-term funds from thegovernment's Fiscal Investment and Loan Program（FILP）, government-guaranteed bonds, and FILP agency
bonds, rather than on short-term funds such as deposits.
To meet unexpected short-term funding requirements, funds on hand are placed primarily in short-term
investments, taking security and liquidity into consideration. Overdraft lines of credit have been established withmultiple private financial institutions. DBJ also maintains daytime liquidity by using the Bank of Japan's RealTime Gross Settlement（RTGS）, whereby settlements are made instantly for each transaction. Every effort is madeto ensure that settlement conditions are managed appropriately.

Operational Risk Management
Operational risk refers to the risk of sustaining losses resulting from employees neglecting to perform theirduties correctly or from accidents, fraud, and so forth. To reduce or prevent operational risk, DBJ prepares
manuals, performs mutual checks on administrative procedures, provides education and training, and employs
computer systems to reduce the burden of administrative duties.

31

DBJ Disclosure 2006

Systems risk refers to the risk of loss due to a breakdown or malfunction of computer systems, system defects, or
improper computer usage. To properly manage systems risk, DBJ is taking the following steps, an internal system tooptimize systems risk management.
DBJ has formulated an Information Security Policy to safeguard the Bank's information systems. Additionally, theBank has established a General Risk Management Commitee to deliberate on matters related to systems risk. DBJ
also set up the General Security Management Division to integrate the maintenance and management of
information security. Information asset officers have been appointed to take responsibility for security measures ineach department and branch office, thus ensuring policy compliance.
As part of its effort to promote systems risk management, DBJ is taking measures to prevent problems andInternal Management System

Systems Risk Management

enhance reliability by standardizing systems development procedures, forestalling fraudulent access through the
management of access privileges and passwords, and by preventing information leaks with thorough information asset
management. In addition to setting up a two-tier system for hardware and software, DBJ has created a backup centerin the event of a malfunction or natural disaster.

Internal Audit Systems
Independent from other management and operational departments, internal audits comprise a series ofprocesses involving not only a comprehensive and objective evaluation of the organization's internalmanagement conditions, but proposals and follow-up measures to improve the issues identified.
DBJ must fulfill our mission as a policy-based financial institution of the Japanese government, while maintaining
our fiscal soundness as a financial institution. Therefore, internal audits are essential if the Bank is to secure
proper internal management and deal with the increasing diversity and sophistication of its operations.
To facilitate this process, DBJ has established an Internal Audit Department and an Inspection Department
under the direct supervision of the DBJ Governor and independent from the operational departments. This
department performs internal auditing and inspections in order to ensure effective and efficient risk
management, reliable financial reports, and compliance with laws and regulations. Through onsite audits andinspections the department verifies the appropriateness and effectiveness of operations management withrespect to risk management and to compliance with laws and regulations. Verification is also made of calculation
procedures for assets self-assessment and allowance for loan losses.
Under the Bank's fair and appropriate internal audit system, the Governor determines the basic policy for auditing andinspection plans based on consultation with the Board of Directors, and important matters relating to audit, inspection
and internal audit results are reported to the Governor after discussion with the Operations Audit Committee.

Internal Audit System
Governor

Board of Directors

Operations Audit Committee

Internal Audit Department

Risk management; investment and loan departments / offices
DBJ Disclosure 200632

Disclosure

Disclosure
DBJ is committed to proper information disclosure, enabling all stakeholders to accurately determine the condition of
the Bank. Information available for disclosure may be obtained from DBJ's head office and branches.

Materials legally required for disclosure

Voulantary disclosed information

Balance sheets（June and November）

Annual Report（August）

Operation report（July）

CSR Report（August）

Financial statements（August）

FinancialReport, in accordance with the Securities

Administrative costs report（June）

and Exchange Law of Japan（ June and December,
Japanese only）（Months in parentheses indicate the issue dates）◆Website Information◆
DBJ's website offers a wide array of information, including an introduction to the Bank, news releases andresearch reports.
＜Website address＞

http://www.dbj.go.jp/english/index.html

Top page

Corporate Social Responsibility（CSR）Activities
CSR Activities As An Integral Part of Everyday Operations
As a policy-based financial institution we strive to apply our long range perspective in accurately assessing the issues
facing the Japanese economy. Our mission is fulfilled by identifying and helping projects that are not merely
profitable but also meaningful for the Japanese economy and society. We help develop these projects byassessing risk and offering high quality financing solutions. We believe pursuing these daily operations incooperation with businesses, private financial institutions, and the public sector is the most important CSR
activity for us.

33

DBJ Disclosure 2006

CSR Activities

Three Priority Areas for Loans and Investments
The three sectors below are priorities in DBJ's loan and investment program.
Community Development:
Helping to create unique, self-sustaining regions
Environmental Conservation and Sustainable Societies:
Contributing to the creation of a harmonious, sustainable society, and a safe, prosperous living
environment
Creation of New Technologies and Industries:
Supporting the creation of economic vitality based on technology, Japan's core strength
DBJ applies a long range perspective in using sophisticated financing methods to provide loans andinvestments. Moreover, the Bank also makes recommendations on plans, supports business formation, andserves in an advisory capacity. In this way, DBJ supports projects with socio-economic significance（pleaserefer to pages 14 -22）
. DBJ's recent noteworthy efforts include its environmental rating system, initiated in April 2004,
and its disaster management rating system, started in April 2006（please refer to pages 17-18）. By providing loans
and privately-subscribed bond guarantees with preferential rates reflecting these ratings and feeding back thescreening results of the rating process, DBJ encourages companies to promote environmental management anddisaster management measures. This is a way of supporting the CSR activities of clients through informationtransmission.

Three Priority Areas for Loans and Investment, and the Triple Bottom Line ※※The triple bottom line is a concept that considers corporate
activities and people's livelihoods from the three vital
perspectives of society, the environment, and the economy.
DBJ's three priority areas coincide with this concept.

SocietyCommunity
development

Building asustainable society
Environmental
conservation andsustainable societies

Environment

Creation of
new technologies
and industries

EconomyAlignment with UNEP FI
The activities of financial institutions have a significant indirect effect on the environment and society, via themedium of business activities. Thus financial institutions have a responsibility that goes beyond mere economic
activities. In June 2001, DBJ became the first Japanese bank to sign the UNEP Statement by Financial
Institutions on the Environment and Sustainable Development, pledging to strive for harmony between economic
development and environmental conservation, and to cooperate in resolving environmental problems. Sincejoining UNEP's Finance Initiative （FI）, DBJ has continued to work with UNEP FI and other institutions topursue the Statement's intent of encouraging financial institutions' commitment to CSR. As part of these efforts,
DBJ has served as chairman of the Asia Pacific Task Force and the Japan Group, established in January 2005.

DBJ Disclosure 2006

34

CSR Activities

Environmental Activities and Communication
DBJ's role as a policy-based financial institution is based on the premise that DBJ will act as a responsible and reliable
member of society, in addition to fulfilling its CSR obligation through loan operations. To meet this expectation, DBJ
is involved with a wide variety of environmental activities and communicates closely with the community, assummarized below.
●Promotion of Environmental Management
The Development Bank of Japan Environmental Policy describes environmental conservation measures that can be carriedout in the office, such as reducing paper and other waste, and using less electricity. The Policy also advocates thepromotion of environmental measures and environmental education within everyday DBJ operations. The Policy aims tocreate an environmentally aware society and economy. Furthermore, DBJ obtained ISO 14001 certification in
November 2002（head office）.
●Green Purchasing
Following Japan's Green Purchasing Law, which went into effect in April 2001, DBJ has set annual numerical targets forpurchasing products and services that are not harmful to the environment.
●Support for Operation of Environmentally Friendly Buses
Since fiscal 2003, DBJ has co-sponsored the operation ofenvironmentally friendly buses carrying passengers free ofcharge between the Otemachi, Marunouchi, and Yurakucho
areas of Tokyo's business district. These buses help raiseawareness around environmental issues all along their route.
●Presentations at Environmental Events
As part of its environmental communication, DBJ makes presentations at environmental events such as Eco
Products, Japan's largest environmental fair. This helps deepen the understanding of the relationship between
finance and the environment.
●Cooperation with Environmental Education
DBJ regularly cooperates with workshops on energy conservation and environmental problems at a middle school. The
students take a quiz on the environment to improve their understanding of environmental issues.

Assessing the Social Contributions of Operations, Using Policy-Based Financing Evaluation
DBJ has carried out policy-based financing evaluations since fiscal 2000 to ensure accountability as a policy-based
financial institution, and to enable employees to keep learning. In addition to monitoring whether DBJ's activities
observe the laws and systems in place, the evaluations also assess each project's socioeconomic effects. In this way,the evaluation is useful as a tool for measuring the extent to which DBJ's loans and investments have fulfilled our
responsibility to the society. Please refer to the management cycle for operations（please refer to page 27）for
information on the structure of the evaluation and the results of the calculations.

CSR Reports
DBJ has issued a CSR related report every year since it first published the DBJ Sustainability Report in 2003. For
more information, please refer to the DBJ website（http://www.dbj.go.jp/english/index.html）.
35

DBJ Disclosure 2006