Deutsche Bank to lend US$1 billion for Japan solar projects

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A director at Deutsche Bank has revealed that the company plans to lend around US$1 billion for the construction of up to six solar power projects in Japan over the next 12 to 18 months.

Last week PV Tech reported that the Spanish developer Gestamp Solar will build its first large-scale solar project in Japan, with Deutsche Bank providing a non-recourse construction loan worth around US$110 million for the project. This is in addition to other recent lending activity in solar by the German bank, including a deal with Conergy worth US$60 million, for global expansion, that was announced yesterday.

The latest news was reported by Bloomberg following an interview with Hans Van Der Sande, the director of Deutsche Bank’s Tokyo-based structured products division. Van Der Sande referred to the first two years of Japan’s feed-in tariff (FiT) programme as a “gold rush” and said that as FiT rates dropped, “the smaller people are leaving and the real players are staying”.

Van Der Sande did not reveal the interest rates applicable to the loans but rates in Japan are currently at an all-time low. He did say however that Deutsche Bank was being approached by non-Japanese companies that are interested in projects in Japan but are “having difficulty” getting finance from Japanese banks. According to Bloomberg, Deutsche Bank will lend the US$1 billion for three to six projects within the next year and a half.

Tokyo-based analyst Dr Hiroshi Matsukawa of RTS PV confirmed in a recent interview with PV Tech’s sister publication Solar Business Focus that Japanese banks tend to strongly favour projects made with domestically produced content over foreign imports. He said that while access to finance with Chinese-made panels, for example was not unheard of, it was far less common than lending to projects by Japanese companies, using Japanese-branded modules and other equipment.

Elsewhere, Deutsche Bank analyst Vishal Shah put out a research note last month to the effect that in markets that are approaching grid parity, the bank expects the amount of long-term investment into solar via yield cos to rise. Yield cos allow investors to buy into an aggregated portfolio of solar generation assets to receive a regular dividend. Shah said that over the next 12 to 18 months, yield cos will be “the most significant positive catalyst for the solar sector”. According to Shah, as many as six more yield co financial structures of the type launched by SunEdison could arrive on the market in the coming period.

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