TOKYO (Reuters) - Japanese lender Sumitomo Mitsui Banking Corporation and other investors are set to invest some 30 million yen ($267,714) in a new program that will see private investments help fund public social services, people involved in the scheme said.

The core unit of Sumitomo Mitsui Financial Group will team up with Japan Social Impact Investment Foundation (SIIF), which launched this month Japan’s first “social impact bond” to fund a Kobe city program on chronic kidney disease.

The debut of a social impact bond in Japan comes amid growing appetite for socially responsible investments focused on improvement of the environment, social and governance (ESG) issues.

Under the project, the municipal government commissions a private-sector firm to provide health guidance to 100 patients. Commission fees depend on the results.

The investors would receive annual interest of up to around 5 percent if the project meets its target and saves public medical costs, according to SIIF.

If the program fails, the investors risk losing their investments.

“Unlike gifts of money, we are expecting this to give an impetus to private-sector investment and give an incentive to the project,” Mitsuaki Aoyagi, CEO of SIIF, told Reuters.

Social impact bonds, pioneered in the United Kingdom in 2010, are aimed at helping municipalities reduce fiscal costs, encouraging private-sector firms to provide merit-oriented social services, while providing new investment opportunities.

As of July 2016, there were 63 social impact bond projects overseas, with investments totaling some $200 million, led by the UK and the United States, according to SIIF.

But it is unclear how popular a social impact bond will be in Japan given that municipalities are slow to embrace it given the complexity of the scheme.