SoftBank Corp. Raising Funds Through a Social Loan to Expand 5G Network and Promote a Digital Society

SoftBank Corp. Raising Funds Through a Social Loan to Expand 5G Network and Promote a Digital Society

As part of its 5th Science and Technology Basic Plan, in 2016 the Government of Japan proposed an aspirational vision, called Society 5.0, that it defined as "a human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space." Furthermore, in November 2021, Japan first outlined its Vision for a Digital Garden City Nation, which aims to achieve a rural-urban digital integration and transformation.

Building digital infrastructure is integral to achieving these initiatives, and 5G networks—with their ultra-high-speeds and high capacity, high reliability and low latency, and massive device connectivity—will play a foundational role to enable autonomous driving systems, telemedicine, smart cities and the digital transformation (DX) of industries. Accordingly, the government set a national goal of achieving 5G network coverage for 95% of Japan’s population by March 31, 2024.

SoftBank Corp. (TOKYO: 9434) surpassed 90% network population coverage with its own 5G network at the end of March 2022. Recognizing the important role that 5G networks will play in resolving various social issues in Japan, such as a declining birthrate, aging population and overconcentration in major cities, SoftBank decided to further expand and strengthen its 5G network by raising up to 35,059,487,624 yen (approximately US$277 million, as of April 18, 2022) through a Social Loan. Proceeds from this Social Loan will be used solely to fund capital expenditures to build 5G terrestrial (or ground-based) base stations.

Social Loans used solely for projects that resolve social issues

What exactly is a Social Loan? The UK-based Loan Market Association (LMA), Asia Pacific Loan Market Association (APLMA) and US-based Loan Syndications and Trading Association (LSTA), publish a high-level framework called the Social Loan Principles (SLP). According to the SLP, “the social loan market aims to facilitate and support economic activity which mitigates social issues and challenges, and/or achieves positive social outcomes.” Simply put, a Social Loan is a loan that uses proceeds exclusively for projects that contribute to solving social issues.

For its Social Loan, SoftBank established a Social Loan Framework and obtained an outside opinion from Rating and Investment Information, Inc. (R&I). R&I verified that SoftBank’s framework conforms with the 2021 edition of the SLP.

This Social Loan represents a new and different Sustainability Finance initiative from SoftBank. Separate to this Social Loan, in January 2022 SoftBank announced the terms and conditions for its Sustainability Bond (HAPS Bond). The proceeds from that bond will be used to fund SoftBank's High Altitude Platform Station (HAPS) business that aims to provide wide-area and stable telecommunication networks from the stratosphere.

With this Social Loan and its other Sustainability Finance initiatives, SoftBank will aim to help create a sustainable society and focus on measures to contribute to the Sustainable Development Goals (SDGs).

(Posted on April 19, 2022)
by SoftBank News Editors