Korean insurers acquire 41 MW solar power project in Japan

Kyobo Life, a Korean insurance company, along with Heungkuk Life and Hanwha Life, have acquired a 41.3 MW solar project in Kagoshima, Japan from the Japanese subsidiary of Solariant Inc, and its partners including Yingli Green Energy Japan.

In a deal transaction totaling JPY20.7 billion (US$172 million), Kyobo Life, Hanwha Life and Heungkuk Life completed both an equity and a mezzanine debt financing with Shinhan Bank and Mitsubishi UFJ to provide senior project debt.

The consortium of these Korean investors acquired full membership interest in Solariant Japan, which serves as the project company established for development of the 41.3 MW utility scale solar project, through a KIAMCO fund called Kirishima Solar Fund Private Placement Special Asset Investment Trust.

The project fund was set up in order to invest in this project and will be managed by KIAMCO, a Korean asset management company and a subsidiary of Korea Development Bank. The mezzanine debt fund will be managed by Darby Hana infrastructure fund, a joint venture between Hana Bank and Darby Overseas Investments, Ltd.

More than 132,000 PV modules will be installed on the 41.3 MW solar plant and will be managed by Genkai Capital, a Japanese asset management company with JPY228 billion (US$2 billion) under management, and Tokyo Energy & Systems Inc, which is partially owned by Tokyo Electric Power Company, the largest electric utility in Japan.

Tokyo Energy & Systems, the construction contractor will be utilizing local labor force for civil works and the installation of the solar facility. 

The 41.3 MW solar plant is scheduled to be completed in the first quarter of 2017 and will feed over 50 million kilowatt-hours of solar electricity annually to power more than 16,000 Japanese homes annually for the next twenty years.

The project is developed under the Japanese feed-in tariff (FiT) scheme with JPY40 (US$0.33) per kWh plus value added taxes. Since the FiT program was launched in July of 2012, the FiT rate has decreased annually from JPY40 (US$0.33) to the current JPY27 (US$0.22) per kWh rate.

The energy generated by the power plant will be purchased by Kyushu Electric Power Company for 20 years. 

According to Daniel Kim and Ric Tan, both Managing Directors of Solariant:

 "Solariant delivered on triple bottom line goals: environmental, social and economic, throughout the planning of the facility, which fit Kyobo Life's corporate sustainability management framework."