Feb 4 2014
Etrion Corporation (“Etrion” or the “Company”), a solar independent power producer, announces an update for its solar project development in Japan as part of the recently announced strategic partnership with Hitachi High-Technologies Corporation (“HHT”) (TOKYO: 8036), a subsidiary of Hitachi, Ltd.
Management Comments
Marco A. Northland, Etrion’s Chief Executive Officer, commented: “We have secured the Feed-in Tariff and have recently executed land agreements for our first two solar projects in Japan, Shizukuishi and Mito, with a combined total capacity of 34 MW. We have also entered into a cooperation agreement with the city of Shizukuishi to advance the development of our project there. Hitachi High-Tech and Etrion are working together to reach financial closing and start construction on both of these solar parks later this year. We continue to target a solar project pipeline in Japan of at least 100 MW under construction or shovel-ready by 2015.”
Mito (9.3 MW)
Etrion has entered into a development agreement with HHT to build, own and operate a solar park, Mito, with a total capacity of 9.3 MW in the Mito region in central Japan. The electricity will be sold through a local energy utility and injected into the Japanese electricity network under the fixed-price JPY-denominated Feed-in Tariff (FiT), already secured for 20 years, equivalent to JPY 40 per kWh (USD 0.39 per kWh). Once operational, Mito is expected to produce approximately 10 million kWh of solar electricity per year. Construction of the Mito solar park is expected to commence in the second quarter of 2014, subject to Etrion and HHT closing the necessary debt financing and completing the permitting process. The solar project is expected to be operational in the first half of 2015.
The total project cost, including costs related to the licenses, permits, development and construction, is estimated to be USD 30 million, which is expected to be financed mostly by long-term, non-recourse project debt in local currency from a Japanese financial institution on competitive terms. The remaining equity portion is expected to be funded 85 percent by Etrion and 15 percent by HHT, according to their respective ownership interests.
Shizukuishi (24.7 MW)
Etrion has also entered into a development agreement with HHT to build, own and operate a second solar park, Shizukuishi, with a total capacity of 24.7 MW in the Iwate region in northern Japan. In addition, Etrion has entered into a cooperation agreement with the city of Shizukuishi to assist the Company with the permitting process. The electricity will be sold through a local energy utility and injected into the Japanese electricity network under the fixed-price JPY-denominated FiT, already secured for 20 years, equivalent to JPY 40 per kWh (USD 0.39 per kWh). Once operational, Shizukuishi is expected to produce approximately 24 million kWh of solar electricity per year. Construction of the Shizukuishi solar park is expected to commence in the second half of 2014, subject to Etrion and HHT closing the necessary debt financing and completing the permitting process. The solar project is expected to be operational in the fourth quarter of 2015.
The total project cost, including costs related to the licenses, permits, development and construction, is estimated to be approximately USD 75 million, which is expected to be financed mostly by long-term, non-recourse project debt in local currency from a Japanese financial institution on competitive terms. The remaining equity portion is expected to be funded 85 percent by Etrion and 15 percent by HHT, according to their respective ownership interests.