The Tokyo Metropolitan Government (TMG) has issued the world’s first Climate Bonds Certified Resilience Bond, raising €300 million to fortify the Japanese capital against escalating climate risks. The five-year bond was oversubscribed seven times, attracting €2.2 billion in bids from nearly 120 institutional investors — a sign that global markets are ready to back adaptation finance at scale.
A global benchmark for resilience finance
Jointly led by Barclays, Bank of America, Crédit Agricole, and Citigroup — which also acted as sustainability structuring agent — the Tokyo Resilience Bond was priced at 40 basis points over mid-swaps after a 6bp tightening. The bond, expected to carry an A+ rating in line with Japan’s sovereign credit standing, is certified under the Climate Bonds Resilience Criteria and Taxonomy — a framework designed to channel capital toward projects that strengthen climate resilience rather than just reduce emissions.
The Climate Bonds Initiative (CBI) developed the taxonomy to define what qualifies as adaptation and resilience finance, filling a crucial gap in sustainable finance markets that have historically focused on mitigation and energy transition.
“This new bond label is a notable development for the market,” said Melissa Cheok, Associate Director at Sustainable Fitch. “The oversubscription signals that investors are ready to allocate capital to these types of investments.”
Financing climate-ready infrastructure
Proceeds from the TOKYO Resilience Bond will fund infrastructure designed to help the city withstand flooding, storm surges, and other extreme-weather events. Key investments include:
- Upgrading river systems to improve flood resilience.
- Developing coastal protection for the Port of Tokyo and surrounding islands.
- Reinforcing river and port infrastructure to prevent damage from storm surges.
- Undergrounding power lines to reduce disaster risk and enhance recovery times.
These projects form part of the TOKYO Resilience Project, a comprehensive plan to safeguard 14 million residents by strengthening the city’s ability to adapt to climate change. The initiative complements Japan’s broader national adaptation strategies, which emphasize local infrastructure resilience and disaster prevention.
A shift from mitigation to adaptation
Until now, the global Climate Bonds Certification framework largely focused on mitigation — financing renewable energy, transport decarbonization, and industrial transition. The introduction of the Resilience Criteria and Taxonomy marks a new frontier: the mainstreaming of adaptation finance as a credible, science-based investment category.
For Tokyo, the achievement goes beyond capital raising. By structuring the world’s first certified resilience bond, the city is signaling to other municipalities and sovereigns that adaptation projects can attract deep global liquidity when backed by credible metrics and transparent governance.
Investor momentum toward adaptation
The strong market response to Tokyo’s issuance highlights growing investor recognition that adaptation finance is essential to sustainable economic stability. As climate impacts accelerate, governments and investors alike are acknowledging that infrastructure protection and resilience upgrades are not costs — but long-term risk mitigation strategies.
The success of this bond could open the door for similar certified issuances across Asia, Europe, and Latin America, helping to diversify global green finance instruments beyond mitigation.
With demand far exceeding supply, Tokyo’s bond establishes a new benchmark for resilience-focused investment, expanding the universe of climate-aligned instruments that now include both mitigation and adaptation within the same certification ecosystem.
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