Switzerland's Etrion Corporation and Hitachi High-Technologies Corporation, a subsidiary of Hitachi, Ltd., have joined forces to construct 34 MW in Japan with financing arranged by Sumitomo Mitsui Trust Bank.
"Japan is one of the largest solar photovoltaic markets in the world and having strong local partners has been instrumental in enabling us to succeed in this exciting market," said Etrion CEO Marco A. Northland. "Etrion is one of the first foreign independent power producers to secure financing to build utility-scale solar plants in Japan and we are now well positioned to replicate this model with Hitachi High-Tech to accelerate our growth plans."
Northland added that the projects expanded Etrion's geographic footprint, providing a clear diversified platform for growth for the company and "bringing Etrion closer to its objective of being in a position to declare dividends in the future."
Noting Etrion's "proven track record in the solar industry," Hidenori Nagao, Hitachi High-Tech's vice president and executive officer, said the company would oversee engineering, procurement and construction operations using Hitachi's PV power generation systems.
Nagao added that Hitachi High-Tech and Etrion were "targeting a total of 100 MW by 2015 and a total of 300 MW by 2017, including these first two projects."
The first two projects include the 24.7 MW Shizukuishi and the 9.3 MW Mito Solar Projects.
The Shizukuishi utility-scale PV power plant will be built in Japan's Iwate Prefecture. Construction is expected to begin in October and the project is expected to be operational by the end of 2016. The plant, which will cover 51 hectares of leased land, will connect through the Tohoku Electric Power utility. Through a power purchase agreement with the Tohoku Electric, the project will receive JPY 40 ($0.39) per kilowatt hour produced. Once operational, Shizukuishi is expected to produce approximately 25.6 gigawatt hours of solar electricity per year.
The Mito project will begin construction in September on 27 hectares of leased land in Ibaraki Prefecture and is expected to be operational by the end of 2015. It will connect to the grid via the Tokyo Electric Power Company, which will likewise pay $$0.39 per kilowatt hour. Once operational, Mito is expected to produce approximately 10.3 gigawatt hours of solar electricity annually.
The companies will finance the projects by way of project debt from SuMi Trust with an 18-year tenor, which will cover 80% of the total cost, with the remaining 20% funded by Etrion and Hitachi High-Tech based on their respective ownership interests of approximately 87% and 13%.
The projects will be built by Hitachi High-Tech using PV generation systems that incorporate Hitachi's power conditioning systems (maximum efficiency: 98.8% at the world's highest standard / maximum direct current voltage input: 1,000 volts) and its amorphous transformers, which are more efficient in practical load and can reduce standby power loss by 70% compared with Hitachi's conventional silicon-steel-cored transformers.
Hitachi High-Tech will provide operations and maintenance services through a long-term fixed-price agreement for each project.
In 2012, Etrion and Hitachi High-Tech signed a development agreement to develop a pipeline of solar assets in Japan, one of the largest PV markets in the world with more than 14 GW of installed capacity and a national solar power target of 28 GW by 2020. Shizukuishi and Mito are the first solar projects to be built under this arrangement, which aims to reach 100 MW by 2015 either under construction or shovel-ready.
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