The Bank of Japan (BOJ) on Thursday offered to extend nearly $18 billion worth of loans to financial institutions in a first auction for a new scheme aimed at promoting activities to fight climate change.
The combined 2.05 trillion yen ($17.94 billion) in loans will be disbursed on Friday and mature in January 2023, the central bank said in a statement.
The BOJ launched a new lending scheme this year under which it offers zero-interest loans that can be rolled over until 2030 to banks that boost green and sustainable loans.
The green plans come as other major central banks, such as the People’s Bank of China, use their institutional heft to take on climate change.
The BOJ said in November that 43 financial institutions, including three megabanks, qualified to tap the scheme.
This year, the BOJ introduced a new fund-provisioning measure for financial institutions that disclose a certain level of information on their efforts to address climate change.
They can receive funds against their investment or loans made as part of such efforts.
“Climate change is a global challenge and could have a broad impact on our society and economic activity into the future,” a BOJ statement said.
“In order to address climate change, various entities in society and the economy need to actively play their roles, in tandem with governments and legislative bodies that formulate relevant policies.”
BOJ has set up an internal network, the Climate Coordination Hub, to enhance bank-wide initiatives on climate change.
“The Bank of Japan has been actively communicating with financial institutions and engaging in international discussions,” it added.
• George Russell with Reuters.