BOJ Expands Climate-Linked Loans Amid Central Bank Mandate Debate
The Bank of Japan (BOJ) has expanded its climate-linked loan program, which now has approximately 21.1 trillion yen in outstanding loans through January 2026. The facility was amended on September 18 and will offer loans twice a year until fiscal year 2030.
Eligible borrowers can draw funds up to the amount of their qualifying climate-related investments and loans, with broad categories such as green loans, green bonds, sustainability-linked finance, and transition finance accepted. The BOJ links the program to its core duties: price stability and financial-system stability.
Critics argue that the central bank's role in determining which types of lending receive preferential funding may resemble industrial policy, which typically belongs to elected governments. However, the BOJ's framework limits this influence by letting financial institutions set detailed eligibility rules.