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Exclusive: Japan to fund private decarbonization efforts

  • August 23, 2021
  • , Jiji Press , 6:30 p.m.
  • English Press

Tokyo, Aug. 23 (Jiji Press)–Japan’s Environment Ministry plans to invest in private companies working on projects to help a shift to a carbon neutral society, Jiji Press learned Monday.
   

In its budget request for fiscal 2022 from next April, the ministry will seek 20 billion yen for financial assistance to such projects, which will be extended through the government’s “zaito” fiscal investment and loan program.
   

Under the zaito program, the government provides low-interest loans and investments for projects for which the private sector alone cannot procure enough funds.
   

State funds help improve the financial strength of companies participating in such projects and make it easier for them to receive investments and loans from private financial institutions.
   

The ministry hopes that the decarbonization projects receiving its assistance will expand their total funds to 100 billion yen by attracting about 80 billion yen from regional banks and other private entities, informed sources said.
   

Companies eligible for the assistance will be those making efforts to save energy, for example by installing renewable energy equipment such as solar panels. Those using rechargeable batteries and electric vehicles will also be eligible.
   

Through the assistance program, the ministry aims to encourage companies to spend more on environmentally friendly equipment and create new business models that will contribute to decarbonization.
   

The ministry plans to continue the program in fiscal 2023 and beyond to help realize the government’s targets of reducing the country’s greenhouse gas emissions in fiscal 2030 by 46 pct from the fiscal 2013 level and achieving carbon neutrality by 2050.
   

The ministry expects to recover its investments through dividend incomes and gains from stock selling.
   

The ministry is considering establishing a new law to designate institutions that will make the envisioned investments.

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