Tokyo is planning to sell a social bond to help prepare for the eventuality of a giant earthquake in the world’s biggest metropolitan area.
The Tokyo Metropolitan Government is proposing to issue ¥30 billion ($231 million) of five-year social bonds later this month. About 80% of the proceeds will be used on disaster prevention measures as well as renovating old bridges and buildings that are at risk of collapse in a major quake, according to Kazumichi Saga, director of the bond section at the city’s finance bureau.
Japan is one of the world’s most quake-prone countries. Tokyo sees a 70% chance of a magnitude 7.0 quake hitting directly beneath the city in the next 30 years, and it could kill more than 6,000 people, injure over 90,000 people and damage more than 190,000 buildings in the densely-populated city.
The social bond will be the third by Tokyo. Its previous note in February earmarked 42.7% of proceeds to disaster prevention steps. The city’s debut social note sold last June focused primarily on helping small-to-mid-sized businesses hurt by the pandemic.
Tokyo is aiming to sell about ¥60 billion of social bonds in the fiscal year started April 1.
Tokyo hired Mitsubishi UFJ Morgan Stanley Securities, Goldman Sachs Securities and Nomura Securities to underwrite the deal.