Canadian Solar, a vertically integrated Tier-1 Chinese solar firm, has today closed a financing deal worth JPY 5.4 billion ($47 million) with Goldman Sachs Japan to aid the development of a 19.05 Mwp solar farm in Japan’s Gunma Prefecture.
The financing package is a dual-tenor green project bond that has a maturity of 1.5 and 20.3 years. These two dates represent the initial and extended tenor respectively, giving Canadian Solar the option to maximize the value of its solar investment in the short term, while providing long-term financial support for its PV projects.
The Japan Credit Rating Agency ranked Canadian Solar’s Gunma Aramaki Solar Power Plant project as “A”, which is the highest rating available to the solar sector in Japan and underlines the banking world’s confidence in both the company and the wider solar industry in the country.
Commercial operation of the solar project is expected to begin in December this year, with Tokyo Electric Power Co signing a 20-year FIT contract at a rate of $0.32/kWh for the solar power produced at the site.
“We are encouraged by the institutional investors’ response to our innovative bond offering,” said Canadian Solar CEO Shawn Qu. “Investors recognize our strong track record of building high quality and bankable solar power projects. This successful offering paves the way forward for Canadian Solar to further issue green project bonds at low coupon rate in Japan.”
Canadian Solar’s project progress in Japan has been emboldened in recent weeks as the firm has secured vast amounts of finance to aid its expansion in the country. Last week Canadian Solar signed a $36 million credit agreement for solar development – augmenting its late-stage development pipeline of 538 MW of PV projects in the country.