- Region: Europe
- Overseas Investment Loans
- Project Finance
The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on November 29 a loan agreement with Triton Knoll OFTO Limited (TK), a British company invested in by TEPCO Power Grid UK Limited, a subsidiary of TEPCO Power Grid Incorporated, and funds managed by London-headquartered infrastructure investor, Equitix Investment Management Limited. JBIC will provide project financing*1 amounting to up to approximately GBP259 million (JBIC portion) for an offshore electricity transmission project for the Triton Knoll offshore wind farm in the United Kingdom. The loan is co-financed with Sumitomo Mitsui Banking Corporation, Societe Generale, Barclays Bank PLC, and Aviva Life & Pensions UK Limited, bringing the total co-financing amount to approximately GBP523 million.
For this project, TK will own and operate facilities for offshore electricity transmission with a total generation capacity of 857MW that are located 32 km off the Lincolnshire Coast in Great Britain. TK will transmit the electricity generated by the offshore wind farm to the National Grid for 23 years.
The Government of the United Kingdom amended its Climate Change Act in 2019, setting a legal target of reducing CO2 emissions to net zero by 2050 and promoting the introduction of renewable energy, and the project conforms with this energy policy of the Government. Also, the know-how gained from the electricity transmission service for the offshore wind farm is expected to be utilized in future projects in Japan and other countries in addition to the United Kingdom.
In the Sixth Strategic Energy Plan released in October 2021, the Government of Japan stated that in the midst of the global move for decarbonization, it is important for Japan to improve the international competitiveness of its industry through support for the development and social implementation of decarbonization technologies by Japanese corporations. In the Infrastructure System Overseas Promotion Strategy 2025 (supplemented in June 2023), the Government of Japan in its support of the transition to carbon neutrality and decarbonization established a policy of providing support for quality energy and electricity infrastructure that harness sophisticated technologies to reduce the burden on the environment in a way that is compatible with the energy policy of host countries. The loan is in line with this policy and will financially support an overseas infrastructure project that a Japanese company has invested in and which will be involved in its operation and management for the long term, thereby contributing toward maintaining and improving the international competitiveness of Japanese industry.
As Japan’s policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in the overseas expansion of their infrastructure businesses toward decarbonization by drawing on its various financial facilities and schemes for structuring projects and by performing its risk-assuming function.
- *1 Project finance is a financing scheme in which repayments for a loan are made solely from the cash flow generated by the project.