March 20 (Reuters) - Japan plans to guarantee up to 180

billion yen ($1.14 billion) in loans for a low-emissions furnace

of JFE Holdings' ( JFEEF ) steel unit, the Nikkei reported on

Friday.

* JFE Steel, Japan's second-biggest steel maker and a unit

of JFE Holdings ( JFEEF ), plans to build a high-efficiency electric arc

furnace at the Kurashiki facility of its West Japan Works, the

report said.

* Loan guarantee comes from the GX Acceleration Agency, a

body formed by the Japanese government to help the transition

from fossil fuels.

* Subsidies from Japan's Ministry of Economy, Trade and

Industry will cover 104.5 billion yen of the total 329.4 billion

yen investment, while the remaining investment will come from

private-sector loans, corporate bonds and other sources, the

report said.

* The guarantee comes as oil and gas prices skyrocket while

the war in the Middle East impacts critical energy

infrastructure and oil supply, raising the need for Japan to

reduce reliance on fossil fuels.

* The furnace is set to be operating as early as fiscal

2028, the Nikkei reported.

($1 = 158.0600 yen)