JICA’s (Japan International Cooperation Agency) plans rebuilds the conflict-affected countries by creating a new ESG bond. JICA’s rate is A+/AA+(S&P/R&I). The agency plans to maintain official development assistance in technical cooperation, loans, as well as grants. They have designed a plan consisting of yen-denominated social bonds of 10 and 20-year issues. They called it the ‘peacebuilding bonds’.
Previously, the agency has mandated a few financial institutions for the tranches. They are Daiwa, Mizhuo, Tokai Tokyo, Nomura, and they will hold 10-year tranche. Meanwhile, Daiwa, Mizhuo, Nomura, and Okasan have the 20-year option. The tranches would be as much as $74m. They argued that there would be more peacebuilding bonds in the future if there are a lot of demands. JICA argues that the sales increase after the intense conflicts. According to the agency there have been around 30 in 2009 to 56 in 2020 of conflicts. Plus, refugees around the world cover 100m in 2022.
The bond announcement has arrived most specifically after Russia’s invasion of Ukraine. But the agency also announced that they prioritize the projects for other impacted countries like Iraq, Philippines and Turkey. The agency argued that they have named the next bond issuance like Ukraine bond due to the variety of conflicts in so many countries. They want to spread the word that war affected countries and the people are suffering around the world. Surely, they need assistance, said Junko Takahashi, the senior director at JICA capital markets.
This became the reason why JICA named the bond based on the theme like ‘peacebuilding bond’. However, JICA’s plan disbursed the bond proceeds around two to three years. They might allocate part of the funds in Ukraine if the ceasefire agreement has been signed.