As the conference looked towards Japan for successful examples of green housing loans and issuances, Masahiro Kobayashi, the Executive Director, Japan Housing Finance Agency (JHF) presented detailed case studies from his organisation’s programmes.
JHF became the first Green Bond issuer in Japan to issue a straight bond purposed to finance the purchase of green housing loans. It also created the Flat 35S Programme, a fully fixed interest rate green housing loan offered by JHF in collaboration with Japan’s private financial institutions, with terms of 35 years.
For the Flat35S programme, JHF applies preferential interest rates for newly-constructed single detached homes that has to meet JHF’s technical specifications of high quality housing that are green and sustainable while also being attractive to consumers: highly energy-efficient, earthquake-resistant, barrier-free (to ensure inclusive accessibility and mobility), as well as being durable and flexible.
Qualifying projects are all subject to meticulous technical and on-site specifications with a strong ecosystem of inspectors from 130 institutions all over Japan. JHF provides instruction manuals to inspectors and monitors these private inspection institutions.
Furthering its commitment towards alternative green housing financing, JHF will also soon issue Green Reform Loans to retrofit existing houses to meet higher energy efficiency standards.
In JHF’s green issuances, Kobayashi cautioned that the 'green premium' was not evident when comparing green bonds with non-green bonds. Yet the number of green bond investors continues to steadily increase, a reflection of consumer demand for such bonds.
To ensure the sustainability of these issuances, Kobayashi advocates for the importance of government support, in the form of bond guarantees, especially at the initial stages.