Etrion closes deal with Ziva Energy for 60 MW Mie solar project

Etrion Corporation has reached a new agreement with Ziva Energy on its dispute regarding the 60 MW Mie solar project. Etrion’s development company in Japan, Etrion Japan KK, had signed a development services agreement (DSA) with Ziva, a Tokyo based developer, in 2015. Under the DSA, Etrion would fund the development of the project and, once completed, it would take over the ownership of the project. In December 2018 the parties entered a dispute regarding the terms of the DSA.

As part of the new agreement, Etrion will proceed in line with its usual investment structure as originally planned. Such a structure will include a contractual arrangement between one of the wholly-owned subsidiaries of Etrion and the Mie project operating company, pursuant to which Etrion will have an obligation to make a financial contribution to the project company in line with the pre-approved business plan.

Pursuant to the agreement, Ziva will acquire Etrion’s contractual structure and associated economic obligations and benefits for JPY3.4 billion (approximately US$32.5 million), with such payment to be made by December 28, 2020. In addition, Etrion Japan KK, will be reimbursed approximately JPY700 million (approximately US$ 6.7 million) of funds advanced to Ziva and will be paid a development fee of JPY 300 million (approximately US$2.9 million) as compensation for all the work performed to date. If Ziva fails to make the required payment of JPY 3.4 billion by December 28, 2020, a subsidiary of Etrion would have the right to take possession of all the shares in the Mie project operating company and either sell such shares or continue with the development of the project.