Swiss solar power company Etrion Corporation has begun construction on its first two projects in Japan totaling 34 MW and jointly owned with Hitachi High-Technologies Corporation, a subsidiary of Hitachi, Ltd.
The projects include the 24.7 MW Shizukuishi Solar Project, which is under construction on 51 hectares of leased land in Japan’s Iwate Prefecture. Construction began in October and the solar project is expected to be operational by the end of 2016. The facility will connect through the Tohoku Electric Power utility, which has a 20-year power purchase agreement (PPA) with the project. Tohoku Electric will receive JPY 40 ($0.37) per kilowatt hour (kWh) produced. Shizukuishi is expected to generate some 25.6 gigawatt hours (GWh) of solar electricity a year.
Etrion and Hitachi High-Tech are also began construction this month on the 9.3 MW Mito PV project on 27 hectares of leased land in Ibaraki Prefecture. The plant is scheduled to be operational by the end of 2015. The facility will connect through the Tokyo Electric Power Company (TEPCO). The project is expected to sign a 20-year PPA with TEPCO by the end of 2014 at the same feed-in rate as the Shizukuishi project. The Mito plant is expected to generate about 10.3 GWh of electricity annually.
The companies are financing 80% of both projects through project debt from Sumitomo Mitsui Trust Bank with an 18-year tenor. The first drawdown of the project loan for Shizukuishi was recently completed. The remaining 20% equity share for the projects is being funded by Etrion and Hitachi High-Tech based on their respective ownership interests in each project of approximately 87% and 13%.
The projects are both being built by Hitachi High-Tech using Hitachi’s engineering, procurement and construction (EPC) capabilities. Hitachi High-Tech will also provide the technology, including fixed-tilt solar panels manufactured by Canadian Solar and inverters made by Hitachi. Hitachi High-Tech will likewise provide operations and maintenance (O&M) services through a long-term fixed-price agreement for each project.
"We have now demonstrated our unique execution capability in the Japanese solar market from greenfield development through project finance and construction and we look forward to accelerating our growth in the months ahead," said Etrion CEO Marco A. Northland.
The chief exec added that Etrion and Hitachi were committed to delivering "shovel-ready or under-construction projects in Japan totaling 100 MW by 2015 and 300 MW by 2017."