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Barclays Bank Structures Project Bond for Renewable Japan's Solar Plant

2019/03/05 17:44
Sousuke Kudou, technical writer
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An agricultural solar power plant (for solar sharing) that Renewable Japan dealt with in Iwate Prefecture (source: Nikkei BP)

Barclays Bank PLC (Minato-ku, Tokyo) announced Feb 22, 2019, that it has structured a "renewable energy project bond" for a 22MW solar power plant being developed and built by Renewable Japan Co Ltd (Minato-ku, Tokyo) in Noboribetsu City, Hokkaido, Japan.

The name of the plant is "Hokkaido Noboribetsu City MS Power Plant." The amount of the bond is ¥8.9 billion (approx US$79.5 million), and the bond was issued Feb 22, 2019.

It is the third project bond that Barclays Bank has issued, following the bonds issued in August 2017 and April 2018, respectively. The official name of the bond is "RJ Renewable Energy Project Bond III Beneficiary Right (GB)/ABL."

The final redemption date is Feb 20, 2041, and the trustee is Hitachi Capital Trust Corp. The latest project bond is targeted at the development of solar projects and power generation businesses after the completion of plants.

Barclays Bank obtained a "green bond rating" for project bonds (GA1: the highest rating) and a second opinion concerning the compatibility with, for example, green bond principles from Rating and Investment Information Inc (R&I). It is Japan's largest-scale green bond issued by project financing.

Also, Barclays Bank received a credit rating of BBB from R&I. This is the first time that a mega solar plant requested to control output without limitation and compensation by a power company has received a credit rating.

The Hokkaido Noboribetsu City MS Power Plant is a solar power plant with a solar panel capacity of 22MW and a grid capacity of 18MW. It is expected to have an effect of eliminating 15,195t of CO2 emissions per year. Electricity generated at the plant will be sold to Hokkaido Electric Power Co Inc. The FIT tariff set for the plant is ¥40/kWh.

The solar panel and PV inverter employed for the plant are products of Lightway Green New Energy Co Ltd and Toshiba Mitsubishi-Electric Industrial Systems Corp (TMEIC), respectively. In the latest project, Nippon Comsys Corp is responsible for EPC (engineering, procurement and construction) services while Renewable Japan provides O&M (operation and maintenance) services. The plant is scheduled to start operation at the end of October 2019.