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Standards for Support Related to Financial Assistance by the GX Acceleration Agency Formulated

August 13, 2024

On August 13, 2024, the Ministry of Economy, Trade and Industry (METI) formulated standards for the GX Acceleration Agency (the Agency) to follow when determining which projects to support by providing financial assistance, including loan guarantees, according to the provisions of Article 57, Paragraph 1 of the Act on the Promotion of Smooth Transition to a Decarbonized, Growth-Oriented Economic Structure (GX Promotion Act) (Act No. 32 of 2023).

1. Background

The Agency was established in May 2024 and started operation in July 2024 with the aim of realizing GX investment of over 150 trillion yen over the next 10 years. The Minister of Economy, Trade and Industry formulated standards for the Agency to follow when determining which business operators are to receive financial assistance, including loan guarantees, and the details of assistance, according to the provisions of Article 57, Paragraph 1 of the GX Promotion Act.

2. Outline of the support standards

1) Standards the Agency should follow when providing financial assistance

The Agency will support projects that fulfill all standards from 1. to 5. below.

  1. Consistency with the government policy
    The business activity of the project complies with the government policy, including the GX promotion strategy and climate transition bond framework.
  2. Promotion of social implementation or business related to technologies contributing to GX
    The project contributes to the promotion of the social implementation of technologies that contribute to GX, such as new technology possessed by Japanese companies, or the promotion of businesses that utilize such technologies.
  3. Complementing risks that cannot be fully addressed by the private sector
    There are risks that truly cannot be mitigated by private financial institutions, and it is necessary to supplement them.
  4. Comprehensive decision-making on the sustainability of business activities for which assistance is to be provided and other matters
    Financial assistance is to be necessary upon comprehensive consideration not only of the sustainability of business activities for which assistance is provided, but also the contribution to GX-related measures, the effect of stimulating private financial business, contribution to the progress of new financing methods, including transition finance and blended finance, and the effect of generating quality employment.
  5. Securing an adequate management and promotion system
    A system which efficiently, effectively, and securely implements assistance projects is established and the management team is committed to implementing the projects.

2) Items that the Agency should try to achieve regarding the financial assistance in general

The Agency should try to achieve all the items from 1. through 6. below.

  1. Foundational concept underlying financial assistance
    Provide financial assistance by securely taking necessary risks in order to prevent the stagnation of GX promotion due to the lack of risk support, while considering whether the risks can be taken by the private sector.
  2. Securing a system for promoting financial assistance
    Actively identifying potential projects, hearing opinions from external experts, securing specialists, etc.
  3. Alignment with the policies of the entire government
    Alignment with the measures of the entire government, including measures related to GX.
  4. Development of human resources focused on promoting GX
    Providing opportunities for active exchange of personnel with the private sector and offering learning opportunities related to GX promotion.
  5. Alignment with stakeholders
    Cooperation with various stakeholders and alignment with relevant ministries and agencies and other governmental organizations.
  6. Information disclosure
    Securing transparency of operation through information disclosure, etc.

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Division in Charge

Environmental Finance Office, GX Policy Group