Venture Firm Building 16MW Solar Plant Leveraging Financial Methods
Project finance replaced by fund
The "RJ Toba Solar Power Plant," a mega- (large-scale) solar power plant with a solar panel capacity of about 16.5MW and a rated PV inverter capacity of 12MW, is being constructed in a mountain forest of Toba City, Mie Prefecture, Japan (Fig. 1).
This power plant is being constructed after acquiring Forest Land Development Permission, and, following land reclamation work, construction has entered the phase of driving pile foundations, assembling mounting systems and setting up solar panels.
The developer is Renewable Japan Co Ltd (Minato-ku, Tokyo), and the power producer is a special purpose company (SPC) established by Renewable Japan.
Renewable Japan was founded in January 2012 by President Katsuhito Manabe, who boasted years of experience in the financial sector. Based on his experience of financing overseas solar power plants, Manabe founded the company with the aim of developing and operating renewable energy-based power plants utilizing financial methods in Japan, where the feed-in tariff (FIT) scheme was to be implemented.
In the projects Renewable Japan developed during its early years, project finance was primarily leveraged as a loan measure. As the infrastructure investment market environment was set in place later in Japan, the company is changing its method to raising funds through public and private offerings while giving plant ownership to a certain fund.
Renewable Japan Energy Infrastructure Fund Inc, a group company of Renewable Japan, has gone public on the infrastructure fund market of the Tokyo Stock Exchange Inc (See related article), having announced joint development and operation of renewable energy-based power plants through private offerings in collaboration with Tokyu Land Corp.
Renewable Japan has announced its plan to jointly develop about 250MW of its projects that have not started operation yet and to jointly structure funds for those power plants with Tokyu Land. Projecting assets of 200 billion yen (approx US$1.8 billion), the company plans to transfer the assets to the infrastructure fund market in order.
The mega-solar plant in Toba City was developed by leveraging the project bond method. Of the entire development fund, 6.9 billion yen was raised through project finance, which was arranged by Barclays Securities Japan Ltd and entrusted to Hitachi Capital Trust Corp.
Renewable Japan is engaged in the entire development and operation of power plants. That includes to secure sites, negotiate with local governments and communities, supervise engineering, procurement and construction (EPC) services and provide operation and maintenance (O&M) services. The company said it applied its own business model, which had been established overseas in advance, to Japan.