Mizuho Will Offer Real Estate Loans Tied to Decarbonization

Daisy Ratnasari

(Bloomberg) — Mizuho Financial Group Inc. will begin offering real estate loans which incentivize property owners to cut greenhouse gas emissions by lowering interest rates if they do so. 

The company will begin offering the loans in April, according to internal documents obtained by Bloomberg. Naohiro Takahashi, a spokesman for the company, confirmed the information. 

Sustainability-linked loans, which offer preferential interest rates for companies that achieve certain environmental and social goals, are expanding in Japan. Last year, 665 of such loans worth ¥711 billion ($4.7 billion) were made, according to government data. 

Decarbonization of newly built real estate is progressing in office buildings, residences, and logistics facilities in Japan, but the process for older properties has been relatively slow. In particular, the purchase and management of existing properties by private funds has been a challenge, as they have been reluctant to invest money in decarbonization amid concerns about yields.  

The loans will be handled by Mizuho Bank and Mizuho Trust & Banking, Mizuho’s internal documents showed. Non-recourse sustainability-linked loans for private funds will be targeted. Goals are set at the time of property acquisition, and the interest rate is reduced based on certain metrics.

Borrowers are required to provide the bank with information on the status of target achievement at least once a year. The bank will also use a third-party evaluation agency to ensure objectivity.

©2024 Bloomberg L.P.

Next Post

Avoid Buying a Home in These 10 Florida Cities

Juliana Vilas Boas / Getty Images/iStockphoto Many people interested in buying real estate head to Florida in search of inexpensive homes. What they don’t often know, however, is that certain Florida housing markets may not offer them the best quality of life. Check Out: Housing Market 2024: Avoid Buying a […]

You May Like