2nd Trasition Linked Loan
In addition to Transition Bonds, JAL established the Framework of Transition Loan and Transition Linked Loan, and decided to arrange the Transition Linked Loan. The JAL Group will continue to contribute to the sustainable society through our ESG strategy.
Summary of Transition Linked Loan
| Amount borrowed (principal guaranteed) | About 11.2 billion yen |
|---|---|
| Loan Execution | February 28, 2024 |
| Use of Proceeds | Purchase of 1 fuel-efficient Boeing 787-8 aircraft |
| External Reviewer | Japan Credit Rating Agency, Ltd. |
| Structuring Agent | Mizuho Bank, Ltd./MUFG Bank, Ltd. |
| Guarantor | Japan Bank for International Cooperation |
| Lender | Mizuho Bank, Ltd. MUFG Bank, Ltd. Sumitomo Mitsui Banking Corporation The Bank of Kyoto, Ltd. The Chiba Bank, Ltd. |
| SPTs | SPT 1: Maintain total GHG emissions (direct emissions, Scope1) in FY2025 compared to FY2019 (Less than 9.09 million tons) SPT 2: Reduce total GHG emissions (direct emissions, Scope1) by 90% in FY2030 to FY2019 (Less than 8.18 million tons) |
Second Party Opinion
Prior to execution of Transition Linked Loan, Transition Loan and Transition Linked Loan Framework was established, in accordance with ICMA "Climate Transition Finance Handbook 2020", Financial Services Agency; Ministry of Economy, Trade and Industry; and Ministry of the Environment, "Japan Basic Guidelines on Climate Transition Finance May 2021",LMA "Sustainability-Linked Loan Principles 2021" and "Green Loan Principle 2021", and Ministry of the Environment "Green Loan and Sustainability-Linked Loan Guidelines 2022".This framework obtained a second party opinion from Japan Credit Research Agency, Ltd. (JCR).
Summary of Transition Loan and Transition Linked Loan Framework
1.Selection of KPI
KPI
Total Green House Gas (GHG) emissions (direct emissions, Scope1)
2.SPTs
SPT 1.
Maintain total GHG emissions (direct emissions, Scope1) in FY2025 compared to FY2019 (Less than 9.09 million tons)
SPT 2.
Reduce total GHG emissions (direct emissions, Scope1) by 90％ in FY2030 to FY2019 (Less than 8.18 million tons)
3.Characteristics of the Loan
The condition of the loan will be changed depending on the achievement of the SPTs. The details will be specifically stated in the loan agreements of each Transition Linked Loan executed based on this Framework.
The achievement status of SPTs will be determined in 2026 and/or 2031 and the date of determination will be specified in the loan agreement at the time of the execution of each financing. If the SPTs have been achieved at the determination date, the interest rate will be stepped down from each interest calculation period after the determination date to the next determination date.
4-1.Use of Proceeds
| Project Category | Eligibility Criteria | SDGs |
|---|---|---|
Upgrading to fuel-efficient aircraft Green Loan Principles: Clean transportation (Environmental objectives: Climate change mitigation) |
"Targets and Initiatives towards CO2 emission reduction by 2030": Upgrading to fuel-efficient aircraft such as Airbus A350 and Boeing 787 |
7. Ensure access to affordable, reliable, sustainable and modern energy for all 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation 13. Take urgent action to combat climate change and its impacts |
4-2.Process for Project Evaluation and Selection
JAL’s Finance Department will consult with the related business departments and select eligible projects for each financing. Executive Officer of Finance & Accounting Division will be responsible to select the eligible projects on behalf of the Board.
Eligibility assessments are executed in a comprehensive manner based on the Eligibility Criteria. In addition, in the operation and implementation of the project, JAL is working on the conservation of the surrounding environment in each related department.
4-3.Management of Proceeds
JAL's Finance Department will manage the allocation of the proceeds annually using the internal management system until the net proceeds from the Transition Linked Loan (specifying the use of proceeds) or Transition Loan have been fully allocated. The proceeds will be managed in cash or cash equivalents until the net proceeds from the Transition Linked Loan (specifying the use of proceeds) or Transition Loan have been fully allocated.
Reporting
KPI・SPTs
| No. | Information to be Reported | Reporting Frequency |
|---|---|---|
| 1 | Performance of the KPI within the reference period |
Annually until the final determination dates, starting from the fiscal year following the year of execution of each Transition Linked Loan
ESG Data Integrated Report ”JAL REPORT” |
| 2 | Performance against the SPTs within the reference period | |
| 3 | Up-to-date information of climate transition strategies relevant to the KPI and SPTs |
Management of Proceeds
| No. | Inforamation to be Reported | Reporting Frequency |
|---|---|---|
| 1 | Aggregated amount of allocation of the proceeds to the Eligible Projects at the project category level, amount of unallocated proceeds and the amount of proceeds used for existing investments | Until the proceeds have been fully allocated to Eligible Projects |
Impact Reporting
Where possible, JAL will report on the following impact metric and the outlines of eligible projects on JAL's website, until the proceeds from the Transition Linked Loan (specifying the use of proceeds) or Transition Loans have been fully allocated.
| No. | Project Category | Reporting Matters |
|---|---|---|
| 1 | Upgrading to fuel-efficient aircraft | Annual CO2 emissions reduced 8 (1,000 ton-CO2)* |
- The reporting covers the period from June 2024 to December 2024.
- This figure is a theoretical value based on calculations from B787-8 introduced on international flights.