Goldman Sachs targets $1 billion renewable energy bond for Japan

Goldman Sachs Group will target US$1 billion of renewable energy bond arrangements to expand clean energy in Japan.

The firm has developed the Japan Renewable Project Bond Trust to play a greater catalytic role in funding the growth of renewable energy projects in the country. The trust will:

• be the first of its kind facility in Japan to bring together institutional investors and clean energy developers
• provide institutional investors opportunity to invest in investment grade rated securitized renewable bonds
• expand capital markets access and more efficient financing to clean energy developers
• help Japan diversify its energy mix and grow domestic clean energy

The trust will target US$1 billion in investor capital within the coming few years and provide institutional investors with broader access to long-dated investment grade rated renewable energy bonds. The investor capital will enable the trust to provide solar and other renewable project developers access to large-scale, more efficient capital market financings as an alternative to traditional domestic bank debt. While this structure is currently focused on solar energy, the firm will expand the trust to other types of renewable energy assets as opportunities arise.

This target exemplifies Goldman Sachs’ continued commitment to supporting the development of renewable energy both in Japan and globally. In May 2012, the company announced a target of financing and investing US$40 billion in clean energy globally over the next decade. In August 2012, they helped establish "Japan Renewable Energy," a company specializing in renewable energy projects, to help address the country’s energy supply–demand imbalance by investing in solar and wind power opportunities.

Toru Inoue, Vice President in Structured Finance at Goldman Sachs, stated:

“With the development of the Japan Renewable Project Bond Trust product, we are now able to offer renewable energy companies attractive rates of capital to fund their growth through the capital markets.”

Yasutoyo Takada, General Manager of Credit Investment Department at Nippon Life Insurance Company, commented:

“Environmentally-focused investments such as Renewable Project Bonds well suit our investment philosophy as they match the highly social and public nature of our business. Since the establishment of our ‘Credit Investment Department’ last year, we have actively been engaged in these types of investments on a global basis, and will continue to do so in order to further enhance our policyholders’ best interest.”

Kyung-Ah Park, Head of Environmental Markets at Goldman Sachs, added:

“We have been seeing an accelerating interest from investors in environmentally beneficial investments particularly those that have long dated, yield oriented cash flows. Being able to link the capital needs of growing renewable energy developers with this investor interest enables us to both serve the needs of our clients and play a catalytic role in deploying clean energy.”