GE Energy Financial Services, a unit of GE, has invested in Kumenan, a 32MW solar photovoltaic power project in Japan, which is being developed by Pacifico Energy.
This transaction contributes to GE Energy Financial Services plan to invest over US$1 billion annually in wind, solar, and other renewable energy projects, its fastest growing energy sector and one that often facilitates sales of GE's energy technology.
Financing for the solar project was done on a non-recourse project finance basis and was supported by a JPY¥11 billion (US$107.5 million) loan from Bank of Tokyo-Mitsubishi UFJ and The Chugoku Bank Ltd.
With approval by Japan’s Ministry of Economy, Trade and Industry, it will sell power through a 20-year power purchase agreement at a fixed tariff rate. The power generated will be sold to the Chugoku Electric Power Co., Inc.
Pacifico Energy, a utility scale solar project developer based in Tokyo and a subsidiary of Virginia Solar Group, is managing construction and operations. Toyo Engineering Corporation is the construction company on the project, and photovoltaic modules are supplied by Yingli Green Energy. The project is expected to reach commercial operations in March 2016.
Kazuomi Kaneto, president of Pacifico Energy, stated:
To maximize our project development expertise and free up capital, we partner with experienced investors like GE Energy Financial Services, which can offer flexible financial structures, strong bank relationships and technical know-how to help enable certainty of execution.