GE energy division sees sunny days for Japan solar project
Updated 9:13 am, Tuesday, October 7, 2014
General Electric has strengthened its position in the alternative energy sector with a major investment in a solar power project in Japan.
GE Energy Financial Services in Stamford, a unit of Fairfield-based GE, has joined Kuni Umi Asset Management and Toyo Engineering in an investment in Japan's largest solar power project, a 231-megawatt facility to be built in Setouchi City, Okayama Prefecture, at a cost of about $1.1 billion.
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 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 -- was provided on a non-recourse project finance basis by a syndicate of Japanese banks, including local financial institutions.
Toyo Engineering and Shimizu Corp. will build the solar photovoltaic plant beginning in November on 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 under a 20-year power purchase agreement. Chudenko Corp. will provide operations and maintenance services.
"Japan's favorable regulatory policies make solar power attractive and diversify the country's power generation sources," said Sushil Verma, a managing director and Japan business leader at GE Energy Financial Services, in prepared comments. "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."
Aside from capital, GE will supply some of the inverters -- marking the debut in Japan of the GE 1 megawatt Brilliance Solar Inverter, which eliminates the need for an intermediate transformer, resulting in higher conversion efficiency and superior grid performance, according to the company.
Kuni Umi is focusing much of its effort on alternative energy projects as Japan is still feeling the effects of the Fukushima Daiichi nuclear power plant disaster of March 2011.
"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," said Yasuyo Yamazaki, president and CEO of Kuni Umi Asset Management, in a statement. "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."