On March 26, NYK received government approval for its business adaptation plan based on Japan's Industrial Competitiveness Enhancement Act, and a day later the company concluded a syndicated transition-linked loan agreement that will utilize a performance-based interest subsidy system (financial support to promote transitions toward achieving carbon neutrality).*

Companies that use a transition-linked loan agreement that will utilize a performance-based interest subsidy system must establish sustainability performance targets (SPTs) based on key performance indicators (KPIs) related to carbon neutrality.

The interest rate on the loan will be reduced by up to 0.2% for subsidies received from the Japanese government based on the degree of achievement of the SPTs. This program aims to promote the implementation of transition strategies by borrowers and promote low-carbon and decarbonization initiatives.

NYK will execute the loan in accordance with the NYK Green/Transition Finance Framework** that the company revised on February 28. The company plans to use the funds to invest in LNG-fueled vessels and other businesses that contribute to low-carbon and decarbonization initiatives, as specified in the company’s medium-term management plan Sail Green, Drive Transformations 2026 — A Passion for Planetary Wellbeing .

Since issuing the shipping industry’s first green bonds in 2018 and subsequently Japan's first transition bonds in 2021, NYK has been committed to sustainable finance. We will continue to promote sustainable finance while raising awareness among various stakeholders about our growth strategy built on sustainable management.

* Refer to the following link for more information on the performance-based interest subsidy system.
https://www.meti.go.jp/policy/economy/keiei_innovation/sangyokinyu/cnrishihokyu/index.html

** NYK Green/Transition Finance Framework
A framework that NYK has established for the use of funds, evaluation and selection of projects, and management and reporting of procured funds, etc., prior to the execution of green/transition finance.

*** Second-party opinion
A second-party opinion on our framework was received from DNV Business Assurance Japan K.K. for the loan's compliance with various evaluation standards, including the International Capital Market Association's “Climate Transition Finance Handbook;” the “Basic Guidelines on Climate Transition Finance” by Japan’s Financial Services Agency, Japan’s Ministry of Economy, Trade and Industry, and Japan’s Ministry of the Environment; “Sustainability-Linked Loan Principles” by the Loan Market Association and others; and Japan’s Ministry of the Environment's “Guidelines for Green Loans and Sustainability-Linked Loans,” etc., as well as the rational of the SPTs established by NYK.