Non-recourse finance, when banks provide a loan against collateral is commonly used for renewable energy projects in many parts of the world. In Japan, domestic banks have been slow to provide non-recourse finance for solar projects and in particular with foreign developers.
SunEdison appears to have cleared this hurdle, with an announcement today that it has secured non-recourse funding for its Tarumizu project. The company rightly claims that it is one of first mega solar projects to be developed by a U.S. company to have secured this form of finance.
GE Energy Financial Services was somewhat of a trailblazer is securing non-recourse finance for solar projects in Japan, after it secured US$1.1 billion for its 231 MW Setouchi Kirei project, in Okayama prefecture. A consortium of Japanese banks provided the funds.
Swiss PV developer Etrion has also had success in raising non-recourse finance in Japan. Last year it worked with the Sumitomo Mitsui Trust Bank for the construction of a 34 MW of PV power plant projects in Japan. Financial close was reached was reached in July and August for the first of the two projects in the 34 MW portfolio*.
SunEdison has not revealed the total of its loan for the Tarumizu project, but it does say that Shinsei Bank will finance 80% of the total project cost. The deal was inked on February 24.
The project is expected to begin commercial operation in September of this year.
*This article was update at 16:30 (4:30pm) CET on Friday March 13 to reflect the Etrion non-recourse deals.