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Japan Post Insurance invests in World Bank’s first Shogun Green Bond

Washington, DC / Tokyo, June 29, 2016The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) and Japan Post Insurance Co., Ltd. (Director and President, CEO, Representative Executive Officer: Masami Ishii, hereinafter “Japan Post Insurance”) are pleased to announce the first ‘shogun’ Green Bond, a Japanese domestic bond issued by the World Bank, denominated in US dollars, dedicated to support the financing of projects that address climate mitigation and adaptation activities.  The USD 100 million bond has been designed in collaboration with Japan Post Insurance which, for the first time, wants to place its assets into a green bond with the World Bank. Mitsubishi UFJ Morgan Stanley Securities was the sole lead manager for this transaction.

The World Bank was the first issuer of a ‘shogun’ bond in Japan more than 30 years ago. That bond, also denominated in US dollars, marked the beginning of a long history of the World Bank introducing products to Japanese investors allowing them to diversify their currency exposure, which continues today.  It followed other World Bank “firsts” that were important milestones in the Japanese market, including the first World Bank ‘samurai’ bond in 1971, and a ‘daimyo’ bond, a JPY-denominated bond, issued in Japan and the global Eurobond market in 1987.

"Be a trustful partner for people, always being close at hand and endeavoring to protect their well-being." This is how Japan Post Insurance defines its management philosophy. It is Japan Post Insurance's social responsibility to work on environmental sustainability to protect the earth and local communities. Its management policy states, "We actively contribute to health promotion, environmental protection, and the development of local communities and society as a whole." Japan Post Insurance is also addressing challenges related to ESG (Environment, Social and Governance) through its asset management strategy and is taking its first step by purchasing World Bank Green Bonds. Japan Post Insurance will continue to fulfill its social responsibility by investing in green bonds and other instruments that not only have a positive social impact but also improves investment profitability through product diversification with appropriate risk management.

World Bank Green Bonds raise funds to support World Bank lending for eligible projects that seek to mitigate climate change or help affected nations adapt to it. Such designated support distinguishes Green Bonds from other World Bank bonds that support sustainable development more broadly. In addition to evaluating the financial terms, investors also assess the specific environmental purpose of the projects whose financing is supported by the Green Bonds. Since 2008, the World Bank has issued over USD 9 billion equivalent in Green Bonds through around 120 transactions in 18 currencies.

"We are very proud to introduce green bonds to the ‘shogun’ market, and honored to have worked in collaboration with Japan Post Insurance to design the product. This World Bank Shogun Green Bond is an opportunity for Japan Post Insurance to support efforts that tackle the origin and effects of climate change through their investments with a product that meets their risk and return objectives. It is a great example of how the private sector and issuers like the World Bank can work together creatively to optimize both financial and social objectives and find solutions to global development challenges," said Arunma Oteh, Vice President and Treasurer, World Bank.

Examples of projects supported by World Bank Green Bonds
The project examples below are for illustrative purposes only and no assurance can be provided that disbursements for projects with these specific characteristics will be made by the World Bank during the lifetime of the bond. Like with all World Bank bonds, Green Bond investors do not take individual project risk.

India- Power System Development Project IV

Project Summary

Purpose: To strengthen India’s transmission infrastructure resulting in decreased greenhouse gas emissions through efficiency gains

Expected Results (include)
68,000 GWh power exchange growth between regions; Reduced transmission losses equivalent to between 526-993 MW; 107,000 circuit kilometers of increased transmission capacity

IBRD Financing: US$400 million additional financing

©Curt Carnemark/World Bank

India’s weak power infrastructure constrains its full growth potential and leaves many households without electricity services. The project supports India's clean energy initiative by strengthening India’s ability to transfer surplus hydro energy to power deficit regions in India, increase transmission efficiency, and avoid building additional coal-based generation.

Indonesia - Water Resources & Irrigation Management Program

Project Summary

Purpose: To strengthen India’s transmission infrastructure resulting in decreased greenhouse gas emissions through efficiency gains

Expected Results (include) Increased crop productivity by providing more efficient and reliable irrigation water; 500,000 farmer households from provinces involving 12 river basins benefited.

IBRD Financing: US$150 million additional financing

©Curt Carnemark/World Bank

Good water resources and irrigation management are essential for Indonesia's water and food security (the bulk of Indonesia’s grain crops are from irrigated areas). This project focuses on developing capacity and infrastructure to improve river basin and irrigation management in selected areas of the country.

Morocco - Solid Waste Development Policy Loan

Project Summary

Purpose: To enhance the governance of the solid waste sector.

Expected Results (include) Regulatory reforms leading to solid waste management programs in 11 municipalities; 30% of waste disposed in sanitary landfills (from 10% baseline) and 21 dumpsites closed or rehabilitated; 735,000 tons of CO2eq.emissions reduced annually.

IBRD Financing: US$132 million additional financing

©Curt Carnemark/World Bank

The project supports regulatory and institutional reforms to improve the operational, financial, environmental, and social sustainability of solid waste programs.

About the World Bank

The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 189 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. The World Bank has been issuing bonds in the international capital markets for over 60 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.

About Japan Post Insurance

Japan Post Insurance Co., Ltd. began operations on October 1, 2007 as the life insurance company within the Japan Post Group of companies. This change followed the privatization of Japan Post and the creation of separate companies for its various businesses. As a member of the Japan Post Group, Japan Post Insurance provides its customers with reliable insurance services, serving individual customers through Japan Post Co., Ltd.’s nationwide network of post offices and corporate customers through sales offices directly managed by the Company.

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