Sumitomo Mitsui Banking Corp, JICA launch sustainable finance framework

The framework will apply to overseas co-finance loans.

Sumitomo Mitsui Banking Corporation (SMBC) and the Japan International Cooperation Agency (JICA) have jointly launched the SMBC-JICA Sustainable Finance Framework, the bank announced in a press release.

It aims to support their clients’ initiatives related to environment, social, and governance (ESG) and sustainable development goals (SDG), as well as promote the spread of sustainable finance in the loan market, said SMBC.

The framework will apply to overseas co-finance loans.

According to SMBC, this marks the first time in Japan that a private financial institution and a development financial institution have collaborated to launch a sustainable finance framework that evaluates the impact of clients’ projects based on common business impact evaluation and monitoring methods.

The framework has been reviewed by the Japan Research Institute (JRI), who reportedly confirmed the framework’s consistency with relevant guidelines and principles.

SMBC will also conduct annual reviews of projects that will receive funds under the framework to ensure that their compliance with the guidelines.

To start, SMBC and JICA successfully closed its first co-financing transaction under the framework with Banque Misr SAE, an Egypt state-owned commercial bank. The funds released will reportedly be used to support micro, small, and medium-sized enterprises (MSMEs), with a noted focus on businesses run by women, the bank shared.

This is also the first loan that JICA co-financed with a Japanese private financial institution targeting the Middle East and North Africa after JICA resumed overseas lending and investment activities.

Photo courtesy of Wikimedia Commons (Suikotei)