Nidec to Issue Green Bonds in Japan

1. Objective and Background 

The world is increasingly going electric to reduce its dependence on coal and other fossil fuels --- non-renewable energy sources deemed responsible for more than three quarters of climate change-inducing greenhouse gas emissions. In the meantime, according to the International Energy Agency, approximately 38% of global electricity still comes from coal-fired power plants. Looking at the demand side, electric motors are estimated to account for half the electricity consumed worldwide. These facts indicate that collective improvements in motion-control efficiency play a key role in the advancement of low-carbon social infrastructure, including road transportation. Acting at the global forefront of motor drive technology and manufacturing, Nidec is committed to doing its part to help curb global warming by serving as a critical gateway to a decarbonized world.
Nidec's strategic response to this top-priority challenge centers on the design and manufacture of environmentally superior motor drive products that enable end applications to outperform the most stringent energy-efficiency and carbon emissions standards in any given industry they serve. With particular reference to the automotive industry, a once-in-a-century technological shift is going on to make more vehicles run on electricity than on petrol or diesel fuels, in which electric traction motors are chosen over combustion engines. Nidec is proactively aligning its technological, manufacturing, and partnership strengths with the transformative trend in ways consistent with the evolving technological requirements of global automakers. One such example is the development of E-Axle, a traction motor system designed to help electric and plug-in hybrid vehicles run with nearzero direct emissions. In addition, Nidec’s own-developed cooling system gives E-Axle extra compactness, allowing automakers to design lighter and less resource-reliant vehicles.
Nidec expects the Issuance to generate an increasingly liquid source of funding necessary to diversify its investor bases and hopes to become part of the meaningful fabric of a thriving bond market and sustainable society.

2. Feature of the Issuance 

Nidec plans to use the proceeds from the Issuance to finance its facilities and R&D activities associated with the design and manufacture of traction motors for electric vehicles. A Second Party Opinion has been obtained from Sustainalytics, a leading international third-party verification provider.

3. Schedule 

Nidec has submitted today an amendment shelf registration statement to the Director of the Kanto Local Finance Bureau. In this Issuance, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Daiwa Securities Co. Ltd. SMBC Nikko Securities Inc., Goldman Sachs Japan Co., Ltd. and JPMorgan Securities Japan Co., Ltd. are appointed as the lead managers. The Issuance is scheduled for the latter half of November 2019 and thereafter, depending on market demand.

The details are as follows:

* Green Bond: Bonds issued to raise funds required for businesses that help solve environmental problems such as global warming.
** For more information on Opinions, please refer to Sustainalytics Website at:
https://www.sustainalytics.com/sustainable-finance/wp-content/uploads/2019/11/Nidec-Corporation-Green-Bond-Second-Party-Opinion-08112019-ENGLISH.pdf
*** Green Bond Structuring Agent: One who supports the issuance of green bonds through the formulation of a green bond framework and advice on obtaining a second opinion, etc.

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