Bloomberg: Goldman Sachs finance for Japan PV cheaper than bank loans

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Long-term financing options for solar power projects in Japan are now being offered by US investment banking firm Goldman Sachs more cheaply than comparable bank loans, according to Bloomberg.

A Bloomberg report this morning said non-recourse loans given to Japanese renewable energy developer Japan Asia Group (JAG) by Goldman Sachs for a number of projects were offered at a rate of between 2% and 3%, while JAG is permitted to sell the notes with interest at “the 1% level”. Bloomberg data showed that average borrowing costs for renewable energy bonds are much higher than that, at 6.4%.

Last month, one of Japan’s three largest banks, Sumitomo Mitsui Banking Corp, started offering a standardised ‘Solar Loan’ to projects under 2MW capacity, of between ¥50 million (US$467,000) yen and ¥500 million (US$4.7 million) with a loan repayment period that can extend up to 16 years. A Tokyo-based PV industry analyst, Dr Hiroshi Matsukawa of RTS Corporation told PV Tech at the time that loan offering from Sumitomo Mitsui was likely to cut waiting times for solar development borrowing from around three months to one month.

However Matsukawa had also said that since borrowers with good credit had always been able to get loans in Japan, it would be a question of speeding up loans that would have existed anyway, rather than creating new liquid capital for projects.

These recent financing developments could be seen as an attempt to help get large-scale solar project development back on track in Japan, after a number of bottlenecks. These include the long-running saga of unbuilt projects that have gained FiT approval, with PV Tech reporting on Thursday that as many as 9.7% of the projects approved in the 2012 financial year have now been cancelled.

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