One of Japan’s three largest banks, Sumitomo Mitsui Banking Corp, has announced that it will offer a ‘Solar Loan’ to speed up the process of building PV plant projects under 2MW capacity.
Under the terms of the loan, the bank will lend companies between 50 million yen and 500 million. The loan repayment period will extend up to 16 years.
Tokyo-based analyst Dr Hiroshi Matsukawa of RTS PV told PV Tech that the introduction of a standard contract for solar lending could reduce the amount of time taken from two to three months down to a month. Previously he said, decisions on lending were made at the discretion of the relevant branch of the bank. Under the new system, the bank’s head office would issue a relevant set of criteria borrowers could meet to qualify.
Importantly, Matsukawa said the loans would be available only in the form of corporate finance and not the project financing Sumitomo Mitsui had provided directly to developers in the past.
Matsukawa said it was likely Sumitomo Mitsui Banking was attempting to gain ground on its rivals, Bank of Tokyo-Mitsubishi and Mizuho Bank. According to local news outlet Nikkei Asian Review, in fiscal year 2013, the three banks between them arranged loans for solar worth around 390 billion yen (US$3.8 billion). Matsukawa said that of the three, Sumitomo Mitsui had been a relative latecomer to solar.
However, Matsukawa said that since borrowers with good credit had always been able to get loans and that this would only speed the process up rather than make access to finance possible for those that had previously not been able to, impact on the industry from the latest announcement was not likely to be great.
PV Tech recently reported Matsukawa’s view that a high number of projects that were yet to be built were causing damage to public views on solar in Japan. The projects have not been constructed for reasons including lack of availability of land and grid interconnection.