Japan plans to use its new type of sovereign debt to fund a wide range of projects designed to reduce emissions, possibly including nuclear power.

Prime Minister Fumio Kishida last week proposed a "green economy transformation bond” to raise as much as ¥20 trillion ($157 billion) to help meet climate goals. The government decided not to issue green bonds because the more standard instruments also constrain the use of proceeds, according to people familiar with the matter.

The government will begin considering a specific framework for the bond this summer, according to an official at the Ministry of Economy, Trade and Industry, which has been tasked with designing a strategy for Japan to achieve its emissions goals.