Kyushu Electric Raises $191M With Japan's First Nuclear-Focused Environmental Bond

Japan’s Kyushu Electric Power Co. KYSEY has successfully raised ¥30 billion ($191 million) from Japan’s inaugural environmental bond designated solely for nuclear projects, marking a significant milestone for the nuclear energy sector in the country.

What Happened: The power company, headquartered in Japan’s southernmost major island, priced a dual-tranche transition bond on Tuesday, Bloomberg reported. The funds are intended to refinance investments in nuclear-related projects, including existing emergency response centers for potential incidents like plane crashes or terrorist attacks.

This issuance follows Japan’s commitment to achieving carbon neutrality by 2050, which has enhanced the appeal of nuclear energy. Despite the ongoing challenge of identifying new radioactive waste disposal sites, the bond received strong investor interest.

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The five-year tranche of the deal received three times more orders than the amount raised, while the 10-year part received 1.1 times more, according to one of the underwriters.

Corporate transition bond sales have been on the rise in Japan since the government’s inaugural sale of such notes in February. The Ministry of Finance recently sold about ¥350 billion of climate transition bonds.

Why It Matters: The success of Kyushu Electric’s nuclear transition bond reflects a broader shift in Japan’s energy landscape. In late 2023, Japan’s largest nuclear power plant geared up for a comeback, signaling a renewed interest in nuclear energy. This bond issuance further solidifies the growing importance of nuclear power in Japan’s energy transition.

Meanwhile, Japan is also making significant strides in its digital bond market. In December, the country saw its largest digital green bond sale, indicating a broader shift toward sustainable and innovative financing methods in Japan’s financial sector.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari