TOKYO -- Japan's Nippon Telegraph and Telephone will issue a new "green bond" to help meet its greenhouse gas reduction targets and increase its investment in renewable energy generation, Nikkei has learned.
The telecom company will issue about 300 billion yen ($2.7 billion) of green bonds, thought to be the largest single issuance of such debt in Japan by an operating company. Green bonds limit the use of the funds raised to environmentally friendly ends.
NTT recently announced that it will reduce its greenhouse gas emissions to virtually zero by 2040 and said it will invest more in renewable energy power plants.
As a growing number of institutional investors emphasize ESG (environment, society, and corporate governance), companies are responding by issuing more green bonds. NTT as a group issued 40 billion yen of environmental bonds in 2020, making the coming issuance a sharp increase. The company is expected to announce the bond issue Tuesday afternoon.
NTT is set to issue three tranches of bonds with maturities of three, five and 10 years. Details, such as the coupon rate are expected to be decided soon. Nomura Securities and Mizuho Securities will serve as lead managers.
NTT plans to use the funds raised to accelerate its decarbonization. It will allocate funds for investment in solar and wind power generation to develop a supply network for renewable energy within the group. NTT has announced plans to invest a total of about 450 billion yen in renewable energy power plants in the 10 years up to fiscal 2030. By the end of fiscal 2030, the company aims to increase the share of renewable energy to 80% or more of the electricity used by its own group, and plans to cover half that with its own equipment.
The goal is to virtually eliminate greenhouse gas emissions in the group's data center business and mobile telecoms unit, NTT Docomo, by fiscal 2030. NTT will also promote the introduction of a unique optical technology for broadband infrastructure that can reduce power consumption, and has set a goal of making the entire group carbon neutral by fiscal 2040.
The global push for decarbonization is spurring the issuance of environmental bonds in a range of industries. Z Holdings, which owns Yahoo Japan, also announced that it will issue environmental bonds in July. The issue amount was 20 billion yen. Motor maker Nidec launched a 100 billion yen issuance in November 2019.