Goldman Sachs Expands Japan 'Green Bond' Project

Goldman Sachs Group Inc GS said Tuesday it will set up a $1 billion bond facility to invest in renewable energy in Japan.

The facility will provide institutional investors with access to investment grade renewable energy bonds and also offer project developers an alternative to traditional domestic bank debt.

This trend also aligns with broader investor interest for environmentally-focused investing in so-called green bonds, according to Goldman.

The total value of all green bonds at the end of 2014 was estimated at about $50 billion, according to the Economist, which noted that the amount is small in comparison with the total size of the bond market at roughly $80 trillion.

The green bond market was pioneered by development agencies including the World Bank beginning in about 2008, but is increasingly dominated by companies like Goldman.

Related Link: Wells Fargo Is Opening Branches While Other Big Banks Are Shutting Them Down

"Environmentally-focused investments suit our investment philosophy as they match the highly social and public nature of our business," Yasutoyo Takada of Nippon Life Insurance Co. told Goldman.

It's not a new market for Goldman, which three years ago announced a target of financing and investing $40 billion in clean energy globally over the next decade.

In August 2012, Goldman helped establish "Japan Renewable Energy," a company specializing in renewable energy projects, to address the country's energy supply–demand imbalance.

While currently focused on solar energy, Goldman's latest green facility will expand to other types of renewable energy assets as opportunities arise, Goldman said.