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Project Financing for First Offshore Wind Power Generation Project
Supporting Participation of Japanese Company in Offshore Wind Power Generation Project in UK by Providing Pound Sterling Loan

  • Region: Europe
  • Infrastructures
  • Environment
  • Overseas Investment Loans
  • Project Finance

August 11, 2014
  1. The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed on August 8, a loan agreement totaling up to GBP172.5 million (JBIC portion) with WMR JV Investco Limited (WMR), a British company, where Marubeni Corporation (Marubeni) has an equity stake, for an offshore wind power generation project in Great Britain. The loan, provided in project financing*1, is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd., Mizuho Bank, Ltd., Societe Generale Corporate & Investment Banking and Siemens Financial Services, with the overall cofinancing amount reaching GBP369.5 million.
     
  2. In this project, Marubeni has established WMR jointly with British company Green Investment Bank Plc (GIB), and, through WMR, acquired 50 percent (of which Marubeni accounts for 25 percent) stake of an offshore wind power generation company Westermost Rough Limited in Great Britain, owned by DONG Energy Wind Power A/S, which is, in turn, a wholly-owned subsidiary of Danish company DONG Energy A/S (DONG), the world's largest offshore wind power generator. Under this arrangement, Marubeni will construct and operate jointly with DONG, the Westermost Rough Offshore Wind Farm located about 8 kilometers off the coast of East Riding of Yorkshire and sell electric power to be generated there.
     
  3. In European countries, including Great Britain, large-scale offshore wind power generation projects have been increasingly developed, and intense competition for obtaining concessions are raging among a number of foreign companies. Given these developments, JBIC's support for long-term overseas projects of Japanese companies by providing Pound Sterling-denominated long-term loans will reduce the exchange rate risk of foreign currency borrowings by project implementers, and thereby contribute to maintaining and strengthening the international competitiveness of Japanese companies. This is consistent with the "Strategy relating Infrastructure Export and Economic Cooperation (revised version in fiscal 2014)," which was decided in the 11th Ministerial Meeting on Strategy relating Infrastructure Export and Economic Cooperation held on June 3, 2014.
     
  4. This project is designated as a joint infrastructure project between Great Britain and Japan based on a memorandum of understanding JBIC signed with UK Trade and Investment on April 10, 2012*2. As British policy-based financial institution GIB also participates in equity investment, it will not only expand business opportunities for Japanese companies in Great Britain, but contribute to strengthening cooperative relations between the two countries as well.
     
  5. As Japan's policy-based financial institution, JBIC will continue to support the overseas business deployment of Japanese companies by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
Note
  1. *1 Project finance is a financing scheme whereby the repayment of a loan extended to a project relies on cash flows generated by the operation of the project, with collateral limited to project goods and other assets.
  2. *2 See Press Release on April 10, 2012.

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