INPEX issues $90m green bond for geothermal, wind investments

INPEX issues $90m green bond for geothermal, wind investments Unit 1 of Sarulla Geothermal Power Plant, North Sumatra/ Indonesia (source: Ormat Technologies)
Alexander Richter 13 Sep 2021

Japanese INPEX is issuing bonds valued at 10bn yen (USD 91 million) for planned investments in geothermal and wind development in Japan and abroad.

Announced in October 2020, Japanese energy company INPEX has now issued green bonds valued at 10 billion yen (around USD 91 million), so Nikkei news agency.

This is the first time for the company that environmental bonds have been issued. The funds to be raised will be used for the development of geothermal power plants and wind power plants in Japan and overseas. Ratings were obtained from Rating and Investment Information, Inc. (R & I).

Environmental bonds have a maturity of 10 years. SMBC Nikko Securities and Mizuho Securities are the lead managers. It is said that it is rare for companies involved in the development of oil and gas fields to issue environmental bonds, including majors in Europe and the United States. INPEX has also procured most of the necessary funds by borrowing from financial institutions, and in March 2021, it was the first company to issue straight corporate bonds.

In the future, it will also aim to send information to overseas investors, such as “considering the issuance of dollar-denominated environmental bonds.” In addition to the highest rank GA1 from R & I, it has also obtained international certification from the Climate Bond Initiative (CBI), a non-governmental organization (NGO) in the United Kingdom.

INPEX’s has a policy of investing about 20 to 30 billion yen annually in the development of renewable energy.

The company has been participating in joint geothermal development studies in Japan in the Oyasu area of Akita Prefecture and the Amemasu area in Hokkaido. As part of these studies, seven exploratory wells were drilled in the Oyasu area while six were drilled in the Amemasu area between 2013 and 2017. In 2018, flow tests were conducted at the exploratory wells in the Amemasu area and at the pilot wells in the Oyasu area. Meanwhile, an environmental impact assessment was initiated as a step toward commencing commercial operations in the Oyasu area.

INPEX has also strengthened its geothermal energy development initiatives outside of Japan. In June 2015, INPEX joined the Sarulla Geothermal Independent Power Producer (IPP) Project, the world’s largest single-contract geothermal power project located in the Sarulla area of Indonesia’s North Sumatra Province. The project commenced commercial operations of the first unit In March 2017, followed by that of the second unit in October 2017 and that of the third and final unit in May 2018. The three units generate a combined power output of approximately 330MW.

Its subsidiary, Teiseki Drilling Col, Ltd. provides geothermal well drilling services and has drilled more than half of all wells connected to geothermal power plants in Japan.

Source: Nikkei, INPEX