The Tokyo Metropolitan Government (TMG) announced plans to issue TOKYO Resilience Bonds, the first-ever certified climate resilience bonds, with proceeds aimed at funding projects to protect the city from natural disasters and the impacts of climate change.
The TMG said that it expects to raise approximately JPY 50 billion (USD$330 million) from the resilience bond offering.
According to the TMG, the proceeds raised under the offering will be used exclusively for initiatives under the TOKYO Resilience Project, with a focus on climate change adaptation and resilience. Launched in 2022, the TOKYO Resilience Project project is aimed at increasing the safety and security of the city from key disaster risks, including storm and flood, major earthquakes, ash from volcanic eruptions, disruption of power supply and communication services, and spread of a new infectious disease.
The new offering plans follow publication of the finalized TOKYO Resilience Bonds Framework, outlining the eligible use and management of proceeds from resilience bond offerings. Eligible projects for use of proceeds will target addressing increasingly severe storm and flood disasters caused by climate change, include upgrading small and medium-sized rivers to enhance flood resilience, developing and upgrading coastal protection facilities, reinforcing river infrastructure, undergrounding utility poles to prevent collapse in the event of a disaster, developing and upgrading sediment disaster prevention and coastal protection facilities, and renovating port facilities to protect remote islands vulnerable to typhoons and coastal hazards.
Yamashita Satoshi, Director General, Bureau of Finance, Tokyo Metropolitan Government:
“In Japan and around the world, it has become an urgent priority to address increasingly severe storms and floods caused by global warming. Against this backdrop, the Tokyo Metropolitan Government (TMG) has decided to issue the TOKYO Resilience Bond, establishing a new model of financing that supports investments in climate change adaptation measures.”
The new bond is the first to be certified under the Climate Bonds Resilience Criteria and Taxonomy, recently released by climate finance group Climate Bonds Initiative, aimed at expanding the focus of climate bonds certification from mitigation pathways and transition to also include adaptation and resilience finance.
Sean Kidney, CEO of Climate Bonds Initiative, said:
“By directing capital into projects that safeguard millions of citizens from floods, storm surges and typhoons, the Tokyo Metropolitan Government is setting a precedent for cities everywhere to invest in resilience. This first Certification under the Resilience Taxonomy creates a new generation of resilience and adaptation-focused finance, a landmark moment for the sustainable finance market.”
