Visit to Plant

Solar Revenue From Prefecture-financed Plant Expected to Benefit Locals (page 2)

Aiming to return 900 million yen in revenue to local community

2013/10/29 11:47
Kenji Kaneko, Nikkei BP CleanTech Institute
Print Page

LLPs were formulated primarily by the Ministry of Economy, Trade and Industry (METI) in 2005 with the aim of stimulating joint ventures by enterprises and special human resources. LLPs can be characterized, for example, by the sponsor’s responsibility, which is limited to the amount of contribution, and the proportion of revenue and correct distribution, which is not bound by the amount of contribution.

Many large-scale solar power plants are run by special purpose companies (SPC). But both revenue at the SPC and dividends to the sponsors are taxed at such stock corporations as SPCs. In an LLP, on the other hand, revenue at the LLP is not taxed, but the sponsors are.

"The LLP method has a number of merits, allowing us to save the taxation on the revenue from electricity sales and return more to the prefectural citizens," Okada said.

Hiroshima Prefecture and the Chugoku Electric Power Group provided ¥540 million and 280 million, respectively, for the 6.6MW first-term solar power plants of the Hiroshima LLP for Promotion of Renewable Energy. Most of the Chugoku Electric Power Group’s investment was provided by Energia Solution & Service (ESS, Hiroshima City). The LLP is also planning to receive a loan of about ¥1.3 billion under project finance, by establishing a syndicated loan from Hiroshima Bank and The Momiji Bank. This is reportedly the first project finance to an LLP.

(Continue to the next page)