GE JV gets US$822 million loan for 231.44MW Japan project

A joint venture involving GE Energy Financial Services has secured a loan worth more than US$800 million for the building of Japan’s largest solar power project to date.

GE Energy Financial Services, the energy investment arm of US multinational General Electric (GE), and its partners in the JV, Tokyo-based Kuni-Umi Asset Management Fund and another Japanese company, Toyo engineering, will build the 231.44MW plant in Setouchi, Okayama Prefecture. The three companies jointly announced the news yesterday, after the loan deal was finalised last week. The JV building the Okayama plant is called Setouchi Kirei Future (‘kirei’ meaning ‘beautiful’ or ‘clean’ in Japanese).

PV Tech reported GE Energy Financial Services’ plan to build the plant back in March. Then it was reported by a wide range of sources that the plant would cost around ¥80 billion (US$777 million), which has now been revised upward to ¥90 billion (US$822 million).

The loan has been secured in the form of non-recourse project finance from three of Japan’s biggest banks, Bank of Tokyo-Mitsubishi, Mizuho Bank and Sumitomo Mitsui. GE Energy Financial Services will hold a 60% stake in the project, while a power purchase agreement (PPA) is in place with regional utility, Chugoku Electric Power, for the huge power plant’s output. According to industry sources, it can be extremely difficult to obtain bank loans in Japan for foreign companies that do not have the backing of local partners.

Japan’s ‘largest solar farm’ record has been smashed every few months, with a bigger announcement to leapfrog the last seemingly always around the corner. A 70MW project completed in November briefly took the crown, before the connection of an 82MW plant in April, and the latest announcement means the 231.44MW plant will supercede a 110MW project currently under development by the clean energy arm of mobile telecoms company Softbank. Construction will begin in October, with completion expected for the second quarter of 2019.