Bonds issued by companies that generate electricity from renewable energy may get preferential treatment, government sources said.
The government may revise the Electricity Business Law to give corporate bonds from such companies repayment priority over other unsecured debt in case the issuer has a management crisis, the sources said Sunday.
The government hopes the step will foster solar, wind and other forms of clean power generation by luring more investors into buying bonds issued by companies undertaking such business.
At present, bonds issued by existing utilities are eligible for preferential treatment by law to facilitate fundraising for plant and equipment.
Construction of a large solar or wind power plant costs around ¥10 billion or more, making debt issuance in capital markets a crucial fundraising instrument for companies eying renewable energy as a business, industry watchers say.
Details, including deregulation measures, will be discussed at the government’s meetings on energy and environmental issues, the sources said.
The Ministry of Economy, Trade and Industry expects expanded power supplies from renewable-energy companies to make up for a drop in output by the major power companies, which have lost many of their nuclear reactors to inspections and protests since the earthquake and tsunami in the Tohoku region last March 11 triggered the Fukushima nuclear crisis and rolling blackouts in eastern Japan.