Sky Solar has increased financing for its ambitious solar development in Japan by more than $33 million following a new agreement with its local business partner.
The groups Japanese subsidiary, Sky Solar Japan, developed and operates 67 solar parks in the country. Following a deal between the unit and its silent partner (known in Japan as tokumei kumiai, or TK), the TK associate will increase its capital contribution to Sky Solars PV installations — which have a combined capacity of 107.9 MW — by JPY 4 billion ($33.2 million). The additional financing brings the TK associate’s total contribution to the partnership to JPY 8.93 billion ($74.3 million).
Sky Solar Japan, which initially partnered with its TK associate on the projects last year, will use $16.6 million from the additional contribution to extend a loan to Sky International Enterprise Group Ltd. (SIE). Proceeds from the 12-year loan, which has a 5% annual interest rate, will be used for the development of PV projects in Asia and the Americas. The remaining $16.6 billion will be used by Sky Solar Japan to continue executing its project pipeline in Japan.
In addition, Sky Solar said its Japanese division and the TK partner would negotiate definitive agreements for further financing arrangements to facilitate the continued development of its project pipeline.
Weili Su, Sky Solar founder, chairman and CEO, added, "We believe this valuable partnership and the terms of our agreement will allow us to maximize shareholder value by reducing our cost of capital as we work to securitize these assets in Japan and further our industry leadership position in this market."