- Nov. 29, 2022
- Nov. 29, 2022
- Nov. 29, 2022
Home > Monetary Policy > Monetary Policy Measures > Market Operations > Funds-Supplying Operations to Support Financing for Climate Change Responses > Outline of Transactions for Climate Response Financing Operations
As of November 26, 2021
Bank of Japan
Financial Markets Department
This document is an outline of the funds-supplying operations to support financing for climate change responses (hereinafter referred to as "Climate Response Financing Operations"). The Bank of Japan conducts these operations based on the "Principal Terms and Conditions of the Funds-Supplying Operations to Support Financing for Climate Change Responses." Please note that the following information may change in the future.
The Bank's Head Office (Operations Department) or its branches.
Collateral accepted under the basic rules concerning collateral as agreed between the Bank and its counterparties.
Eligible counterparties shall, pursuant to the Bank's relevant rules, be selected from financial institutions, etc. (prescribed in Article 37, paragraph 1 of the Bank of Japan Act [Act No. 89, 1997]) and the Development Bank of Japan Inc. that satisfy the following requirements. The Bank shall review eligible counterparties annually in principle.
Loans shall be provided in the form of electronic lending.
The duration of each loan shall be one year in principle. Loans may be provided successively as the Bank shall disburse new loans on the maturity date of the existing loans.
The interest rate on loans shall be 0 percent per annum.
Counterparties of each loan shall be eligible counterparties that wish to receive loans.
The maximum amount of loans for each counterparty shall be equivalent to the amount outstanding of investment or loans by counterparties to contribute to Japan's actions to address climate change, with a remaining maturity of 1 year or more at the time (the end of March or September) determined at each loan disbursement pursuant to the Bank's relevant rules.
The investment or loans that contribute to addressing climate change shall be those that counterparties themselves determine to satisfy either (a) or (b) below.
Each counterparty shall disclose international standards or the Japanese government's guidelines (I. (a)), or the contents of its own criteria it established (I. (b)), used to determine which investment or loans contribute to addressing climate change.
When conducting the Climate Response Financing Operations, the Bank selects auction participants from eligible counterparties and notifies them of the following matters through the Bank of Japan Financial Network System (BOJ-NET).
By the bid-submission cut-off date and time notified in subsection A., auction participants, through the BOJ-NET, notify the Bank their desired amount of loans.
The Bank, after receiving bids as described in subsection B., accepts bids by the desired amount of loans. However, the Bank reserves the right to reject all or some of bids which a counterparty submits when deemed appropriate.
When accepting bids, the Bank, through the BOJ-NET, notifies the amount of loans to auction participants as described in subsection B. Here and hereinafter, those who receive such notifications will be referred to as borrowers.
Borrowers submit collateral valued higher than the interest rates payable on loans, calculated based on the number of days from the day following the loan disbursement date to the maturity date, added to the amount of loans, by the loan disbursement date notified in section III. A. and the time determined by the Bank.
Borrowers request loan disbursement by the settlement date notified in section III. A. and the time determined by the Bank.
Based on subsections 1. and 2., the Bank disburses loans when it receives requests from borrowers who have submitted collateral.
The Bank disburses loans to borrowers on the loan disbursement date notified in section III. A.
In addition to loan amounts, borrowers shall repay loan interest to the Bank, calculated based on the number of days from the day following the loan disbursement date to the maturity date, by the maturity date notified in section III. A. and the time determined by the Bank.
Borrowers shall repay loans to the Bank on the maturity date notified in section III. A.
Timetable and schedule related to the operations described in section III. will be released prior to the offer.