Project Financing for Offshore Wind Power Generation Project in The Netherlands
Supporting Participation of Japanese Company in Offshore Wind Power Generation Project
- Area: Europe
- [Project Finance]
- Overseas Investment Loans
The Japan Bank for International Cooperation (JBIC; Governor, CEO: Hiroshi Watanabe) signed on March 9 a loan agreement totaling up to approximately EUR244 million (JBIC portion) with Clusius C.V. (CLUSIUS), a limited partnership in the Netherlands invested in by Mitsubishi Corporation (MC). This loan is provided in project financing*1
for an offshore wind power generation project in the Netherlands. The loan is cofinanced with private financial institutions, bringing the total cofinancing amount to approximately EUR443 million.
The loan is intended to provide the long-term financing that is necessary for CLUSIUS, jointly established by MC and Eneco Holding N.V. (Eneco), one of the largest Dutch power and energy company, to operate the Luchterduinen (Q10) offshore wind farm and sell the generated electricity to Eneco Energy Trade B.V. (a wholly-owned subsidiary of Eneco) over a period of 20 years*2
MC is committed to the development of renewable energy sources which create sustainable environmental value, and has set out a policy to aggressively work on wind power generation projects, particularly in Europe where the introduction of renewable energy sources is actively promoted. These projects include onshore wind power generation projects, in addition to the offshore projects which enable large-scale development. With offshore wind power generation being one of the new frontiers of renewable energy, Japanese companies have not yet managed to build a track record in such projects overseas. JBIC's support for Japanese companies to participate in such projects through long-term financing will contribute to maintaining and strengthening the international competitiveness of Japanese industries.
Renewable energy projects are positioned as part of the new frontiers in infrastructure that are subject to support in the Japanese government's strategy, which aims at promotion of Japanese involvement in projects including the design, construction, operation, and management of infrastructure. Such projects are also in line with an initiative announced by the government in November 2015, "Actions for Cool Earth: ACE 2.0", which promotes the advancement of low-carbon technologies.
As Japan's policy-based financial institution, JBIC will continue to support the development of overseas infrastructure projects by Japanese companies, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
- *1 Project finance is a financing scheme in which repayments are made solely from the cash flows generated by the project and secured only on the project assets.
- *2 MHI Vestas Offshore Wind The Netherlands B.V., the supplier of wind power generation equipment for this project, is wholly owned by MHI Vestas Offshore Wind A/S, a Danish company. JBIC has provided financing for the establishment of the Danish company, which is invested in by Mitsubishi Heavy Industries, Ltd. See Press Release on April 1, 2014 for details.