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RENOVA reaches financial close for 75 MW Kanda biomass power project

Japan-headed developer and operator of renewable power plants RENOVA, Inc., has announced that it has reached financial close for the Kanda Biomass Power Generation Project at Kanda-machi, Miyako-gun in Fukuoka Prefecture, Japan. With an installed electrical capacity of approximately 75 MW, it is one of Japan’s largest dedicated biomass power projects.

Dr Ha-Yan Lee, Executive Adviser & General Manager, Global Strategy & Partnerships at RENOVA Inc., outlining how the company, a developer, and operator of renewable power plants, operates during the Biomass Pellets Trade & Power conference in Tokyo in May. The company aims to have 1 GW installed renewable power capacity in Japan by 2020 including biomass. Currently, it has a 20.5 MW biomass power plant in Akita and another five 75 MW biomass power plant projects, including Kanda Biomass Power, under development.

According to lead sponsor RENOVA, the company together with its co-sponsors Sumitomo Forestry Co., Ltd, Veolia Japan K.K., Kyuden Mirai Energy Co., Inc., and Mihara Group K.K. reached financial close on June 22. The consortium has jointly prepared and invested in Kanda Biomass Energy K.K, a special purpose vehicle (SPV) for the project, with construction start set for November 2018 and operations scheduled to begin in June 2021.

Benefitting from the Japanese feed-in tariff (FIT) scheme, the project aims to generate electric power solely from wood biomass energy sources such as wood pellets and domestic unused wood and other fuels like palm kernel shells (PKS). With an approximate capacity of 75 MW, and as such it has one of the largest capacities among projects of its kind in Japan. RENOVA is also moving forward with biomass power generation projects with comparable capacities in other regions.

The financial close led to the formation of a project finance syndicate. Mitsui Sumitomo Banking Corporation acts as lead manager and two local businesses – Bank of Fukuoka, Ltd and Fukuoka-Hibiki Shinkin Bank. In addition, Bank of Saga Ltd, Daishi Bank, Ltd, Chugoku Bank, Ltd, Dai-ichi Life Insurance Co., Ltd, Daido Life Insurance Company, Nippon Life Insurance Company and Meiji Yasuda Life Insurance Company have joined the syndicate.

As mezzanine lenders, JA Mitsui Leasing, Ltd and Sumitomo Mitsui Finance and Leasing Co., Ltd provide subordinated loans. In this project, RENOVA is the lead sponsor and will be responsible for developing the project. The Sumitomo Forestry Group will supply domestic unused material and PKS. The Veolia Group will operate the power plant.

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