Originally published by Global Legal Group Ltd, London.

1 Overview

1.1 What are the main trends/significant developments in the project finance market in Japan?

The project finance market in Japan has developed hand-in-hand with Private Finance Initiatives (PFI). Since the enactment of the Act on Promotion of PFI (“PFI Act”) in 1999, hundreds of PFI projects have been implemented, totalling 4.7 trillion Japanese Yen by the end of 2009. In 2010, the Japanese cabinet declared its plan to increase the number of PFI projects, setting the goal of achieving an aggregate of 10 trillion Japanese Yen in PFI volume over the 11 years leading up to 2020. It could be said that the environment for project finance, including PFI, changed on March 11, 2011, as the Act on Special Measures concerning the Procurement of Renewable Electric Energy by Operators of Electric Utilities (“Feed-In Tariff Act for Renewable Energy”) and the amended PFI Act were approved by the Cabinet in the morning, and the devastating earthquake hit Japan in the afternoon on that day. Hopes are high that project finance, including PFI, will play an important role in the reconstruction of the tsunami-stricken area and the development of new sources of primarily renewable energy that can supplement nuclear power.

1.2 What are the most significant project financings that have taken place in Japan in recent years?

In 2005, the Japanese government announced its plan to utilise the PFI Act to design, build, manage and maintain the international flight area of Tokyo’s Haneda Airport. The plan consisted of three separate PFI projects: passenger terminal operation; the cargo terminal operation; and the airport apron operation, all of which opened in 2010 and are scheduled to operate for 30 years. This was the first use in Japan of PFI for a core national transportation infrastructure project.

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