Tokyo Metropolitan Government's JPY30 billion ($226 million) five-year bond stood out to the Bond Awards judges for being the first municipal bond issuer in Japan to be involved in the sustainable bond market.

Judges also applauded its broad range of use of proceeds.

Proceeds from the sales have been used for 25 different projects, including:

• Implementation of natural disaster countermeasures;
• Projects that promote industry and employment;
• Long-term care infrastructure;
• Child welfare facilities;
• Maintenance of aging public facilities;
• Construction and renovation of schools; and
• Measures to make public facilities more universally accessible.

This is an expansion from the 15 projects targeted in the second series of the bond.

The bond is structured around the Social Bond Principles and attained a second opinion from local ratings agency Rating and Investment Information.

Satoru Kawahito, head of Japan public sector and infrastructure banking at Goldman Sachs said: "As the only Japanese municipal issuer of social bonds, Tokyo has laid the groundwork for others at a time when funding diversification and ESG alignment are growing priorities".

The issuance was oversubscribed, with more participation from overseas investors, according to Goldman Sachs.

Kawahito added the "favourable response from investors demonstrates confidence in the city's future and its role as a leading international financial sector".

The metropolitan government said it aimed to raise around JPY100 billion last year across its ESG bond programme.