Construction of the plant is underway in Hosoe on Kyushu Island, in the prefecture of Miyazaki.
MIYAZAKI CITY, Japan--GE unit (NYSE:GE) GE Energy Financial Services and Virginia Solar Group subsidiary Pacifico Energy have partnered for a third time to construct a solar power project in Japan. GE Energy Financial Services and Virginia Solar Group will jointly invest equity in a 96.2-megawatt (DC) photovoltaic solar plant, with GE Energy Financial Services' commitment totaling ¥7.5 billion. Construction of the plant is underway in Hosoe on Kyushu Island, in the prefecture of Miyazaki. A ¥35 billion term loan facility with a 22-year tenor – led by The Bank of Tokyo Mitsubishi UFJ, Ltd. as the sole and exclusive mandated lead arranger – was provided on a non–recourse project finance basis with a syndicate of 12 Japanese financial institutions. Additional transaction details have not been disclosed.
Pacifico Energy is the project developer managing construction and operations of Hosoe, which is being built on 140 hectares of land that was originally intended for a golf course. Once complete, it will be the largest solar power plant on Kyushu Island and consist of approximately 300,000 photovoltaic modules supplied by Trina Solar. Toyo Engineering Corporation is the construction company on the project, and Asahi Dengyo is providing operations and maintenance services. In addition to capital, GE is supplying the project with 50 units of 1.26-megawatt Brilliant solar inverters, which eliminate the need for an intermediate transformer, resulting in higher conversion efficiency and superior grid performance.
Hosoe is expected to begin commercial operations in the spring of 2018 and will sell its power to Kyushu Electric Power Company under a 20-year power purchase agreement. It is expected to generate enough clean energy to power up to 30,000 households and avoid 68,200 tons of CO2 emissions per year.
By 2020, Japan aims to have 20 percent of its energy generated from renewable power sources, a goal which is supported by the country's regulatory policies and feed-in tariff. Sushil Verma, a managing director and head of Asia Pacific at GE Energy Financial Services, notes that Hosoe is the third transaction between GE Energy Financial Services and Pacifico Energy that contributes to the country's renewable energy goals.
"We aim to continue helping Japan achieve a diversified power mix. Working with reliable and regional counterparties supports our international expansion and renewable energy investment commitments," Verma says.
GE Energy Financial Services has made equity and debt investment commitments of $1.9 billion in nearly two gigawatts of solar power projects worldwide, and plans to continue to invest over $1 billion annually in renewable energy projects. Hosoe is the fourth Japan solar project in which GE Energy Financial Services has invested since last May. Last year, the company invested in Pacifico Energy's Kumenan and Mimasaka Musashi solar projects in May and December respectively, and in September, the GE unit helped finance Japan's largest solar project, which is being built in Setouchi City.
Kazuomi Kaneto, president of Pacifico Energy K.K. added "We are excited about partnering again with GE on Japan's third largest solar power plant, and the largest in the country which is invested 100 percent by foreign financial institutions. This investment, leveraging the extensive development experience of our team, helps Japan achieve 20 percent of its power generated from renewable sources."
Pacifico Energy has started construction on 75 megawatts (DC) of solar power projects in Japan in 2014 and is set to start construction in early 2015 on another 149 megawatts (DC). The company currently has another 300 megawatts (DC) in development.