In a bid to bolster supply chain resilience in vital industries such as semiconductors and batteries, the government-backed Development Bank of Japan (DBJ) is set to inject over 150 billion yen ($1 billion) into these sectors. The investments, to be spread out over two years starting from fiscal 2024, will come in the form of capital injections and subordinated debt.
Under this funding framework, which taps into government investment, the DBJ will allocate funds for capital spending and research and development activities related to next-generation semiconductors, storage batteries, and critical commodities like rare-earth metals. Additionally, investments will be made in infrastructure, including logistics facilities, to support supply chains.
One of the key investments in this initiative is expected to be an injection of up to 15 billion yen to boost the production of automotive lithium-ion battery materials at Japan’s Artience (formerly Toyo Ink SC Holdings). This funding will support Artience’s 49-billion-yen capital spending plan in Japan and overseas. Instead of conventional repayment, the DBJ will receive a share of earnings from Artience’s battery materials business over time.
The overarching goal of this investment drive is to catalyze private-sector investments in industries crucial for economic security. By alleviating the burden of capital spending and R&D funding, the DBJ aims to enhance Japan’s competitiveness in international markets. This approach mirrors strategies adopted by the U.S. and the U.K., which utilize blended finance to address the capital requirements of major industrial transitions.
In addition to investments in supply chain resilience, the DBJ plans to allocate over 100 billion yen, primarily in startups focused on innovation, and more than 150 billion yen in renewable energy and other initiatives aimed at reducing carbon emissions over the next two years. These initiatives signify a ramp-up in funding activities by the DBJ, aiming to accelerate progress in various sectors crucial for Japan’s economic growth and sustainability.
