Kuni Umi Asset Management, GE (NYSE: GE) unit GE Energy Financial Services and Toyo Engineering Corporation have invested in Japan’s largest solar power project, a 231-megawatt facility to be built in Setouchi City, Okayama Prefecture, via special purpose company and representative member Setouchi Future Creations.
GE Energy Financial Services holds a 60 percent stake in the project, one of the largest single equity investments in renewable energy in Japan. Financial details were not disclosed.
To support the approximately $1.1 billion project, the three owners have raised more debt than any prior renewable energy project in the country. An $867 million loan — led by Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corporation — was provided on a non-recourse project finance basis by a syndicate of Japanese banks, including local financial institutions.
Toyo Engineering and Shimizu Corporation will build the solar photovoltaic plant beginning in November on 260 hectares (1,210 acres) of city land on the former Kinkai salt field. The project is expected to reach commercial operations in the second quarter of 2019 and sell its power to Chugoku Electric Power Company under a 20-year power purchase agreement that uses Japan’s renewable energy feed-in-tariff regime. Chudenko Corporation will provide operations and maintenance services.
Yasuyo Yamazaki, the president and chief executive officer of Kuni Umi Asset Management and a key player in the project, said: “In addition to the Setouchi solar project, we developed a mega-solar power plant in Mito-city Ibaraki Prefecture and started the construction of a woodchip biomass fuel power plant in Kawaminami-cho, Miyazaki Prefecture. Now we are planning a wind farm in Nakadomari-cho, Aomori Prefecture. With these projects, we are contributing to the Ideal Region Development with renewable energy.”
Sushil Verma, a managing director and Japan business leader at GE Energy Financial Services, said: “Japan’s favorable regulatory policies make solar power attractive and diversify the country’s power generation sources. For us, the Kuni Umi project expands our international and renewable energy footprints, which already include investment commitments of $1.8 billion in equity and debt in more than one gigawatt of solar power projects worldwide.”
In addition to capital, GE will supply some of the inverters — marking the debut in Japan of the GE 1 MW Brilliance Solar Inverter, which eliminates the need for an intermediate transformer, resulting in higher conversion efficiency and superior grid performance.