Oct. 18 (Bloomberg) — Two Japanese clean energy funds plan to raise about 1 billion yen ($10 million) from the public and urge regional financial institutions to provide loans for wind and solar projects to boost the local economy.

Ohisama Energy Fund Co. and Japan Green Fund Co. will help regional power producers raise money, they said in a statement yesterday. The Institute for Sustainable Energy Policies will help developers set up business plans.

The group is raising 350 million yen for a solar and biomass project in Nagano prefecture and plans to raise money for other developments in Hokkaido, Fukushima, Kanagawa and Yamaguchi prefectures by early next year.

Local banks and credit unions must get involved for such regional renewable projects to succeed, Koichi Ito, a professor at the Graduate School of Accounting and Finance at Chiba University of Commerce and an adviser to the group, said at a Tokyo news conference yesterday.

“Big companies come to rural areas to produce power and take money back to urban areas,” he said. “We need investment by citizens and cooperation from local financial institutions to help the money flow locally.”

To help local lenders new to solar projects, the Ministry of the Environment is preparing a handbook. Japan introduced an incentive program for clean energy in July 2012 which helped the country’s mostly residential solar market expand into commercial and utility-scale projects.

Local Loans

“There is increasing need for loans provided by local financial institutions” for projects led by regional developers and non-profit organizations, the ministry said in a draft of the handbook, which is to be distributed early next year. “There are increasing expectations that financial institutions should be able to gauge the feasibility of each project in such a new field as renewable energy.”

The two funds aim to raise about 2 billion yen for several projects for the year starting April 1, Toru Suzuki, who heads Japan Green Fund, said yesterday.

Japan Green and Ohisama Energy have been raising money for renewable projects since 2003 and 2004, respectively, according to the statement.

To contact the reporter on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Iain Wilson at iwilson2@bloomberg.net