Hitachi Zosen Green Bonds (27th unsecured bonds)
Hitachi Zosen Corporation has decided to issue "Hitachi Zosen Green Bonds" via public offering to the Japanese market as a second green bond issuance after the issuance in September 2018.
Green bonds are issued by companies, municipalities, or other organizations to raise funds for Green Projects that produce environmental benefits, such as renewable energy projects, energy-efficient building construction and renovation, and prevention and management of environmental pollution.
Purpose of the Hitachi Zosen Green Bond Issue
As society moves toward the achievement of the SDGs (Sustainable Development Goals) adopted at the United Nations Summit and a recycling society, we position the business of producing clean energy as one of our core businesses. The funds raised by the issuance of this green bond will be allocated to investment and construction costs for a wind power generation business. By issuing green bonds, we will diversify the means of financing, and will also contribute to the realization of a recycling society by introducing more environmentally friendly facilities.
Overview of Hitachi Zosen Green Bonds
| Issuer | Hitachi Zosen Corporation |
|---|---|
| name | Hitachi Zosen Corporation 27th Debenture Bonds (Hitachi Zosen Green Bonds) |
| date of issue | October 28, 2021 |
| Condition decision date | October 22, 2021 |
| Issuance period | 5 years |
| Issue amount | 10 billion yen |
| Interest rate | 0.43% per year |
| Use of funds | The net proceeds of the bond will be allocated to finance repayment of funds for borrowings to invest in the special purpose company of Mutsu Ogawara Onshore Wind Farm Project and to working capital as expenses for purchasing materials for construction of the facility ordered from the special purpose company. |
| Green Project | Mutsu Ogawara Onshore Wind Farm Project |
| Corporate bond rating | BBB+(JCR) |
| Lead underwriter | Nomura Securities Co., Ltd. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. |
| Green bond structuring agent(Note 1) | Nomura Securities Co., Ltd. |
Someone who supports the issuance of green bonds through the formulation of a green bond framework and advice on getting a second opinion.
Overview of projects
Mutsu Ogawara Onshore Wind Farm Project
| Name of project | Mutsu Ogawara Onshore Wind Farm Project (tentative) |
|---|---|
| Investors: Investment ratio |
Mutsu Ogawara Wind Power LLC Hitachi Zosen (Representative Partner/Managing Partner): 50% ITOCHU (Managing Partner): 50% |
| Construction contractor | Hitachi Zosen Corporation |
| Operation and maintenance operators after the start of operation | Hitachi Zosen Corporation |
| Power output | Maximum 57,000 kW (4.3 MW turbines × 15 units) |
| Start of construction | FY2022. |
| Start of operation | In or after 2024 |
Third-party assessment of eligibility
① Second party opinion
As a third-party evaluation, we obtained a second party opinion from DNV Business Assurance Japan K.K., a pioneering international organization on risk management to ensure the eligibility and transparency of this green bond and improve its appeal to investors.
② The Ministry of the Environment's 2021 Green Bond Issuance Promotion System Development Support Project.
Regarding the acquisition of third-party evaluations for Green Bonds, it is a target of subsidy grants by the 2021 Financial Support Programme for Green Bond Issuance, etc. (Subsidy Project)(Note 2) of the Ministry of the Environment.
(Note 2) Financial Support Programme for Green Bond Issuance, etc. (Subsidy Project)
Project where subsidies are provided for the expenses that are required by registered issuance supporters who support companies, municipalities and other bodies seeking to issue Green Bonds, etc., in the form of granting external reviews, or consultation on establishing a Green Bond framework, etc. All funds raised for target green bonds must be allocated for green projects and must meet all of the following at the time of issuance.
- 1Green Project that meets one of the following criteria:
- ①Contributes mainly to domestic decarbonization (renewable energy, energy efficiency, etc.)
- Projects for which equal to or more than half of the procured amount, or equal to or more than half of the number of projects is domestic decarbonization-related project.
- ②Has high decarbonization effects and effects on vitalization of local economy.
- Decarbonization effects: Those whose subsidy amount per ton of domestic CO2 reduction is less than the specified amount.
- Effects on vitalization of local economy: Projects that are expected to contribute to effects on vitalization of local economy as part of the ordinance and plan, etc.
decided by the municipality, projects for which investment by municipalities can be anticipated, etc.
- ①Contributes mainly to domestic decarbonization (renewable energy, energy efficiency, etc.)
- 2Compliance with the Green Bond Guidelines to be confirmed by an external review organization before issuance.
- 3It cannot be "Green wash" bonds.
Green Bond Framework
Reporting
- DNV GREEN BOND PERIODIC REVIEW(October,2022):