Japan-headed developer and operator of renewable power plants RENOVA, Inc, has announced that it has reached financial close and made a final investment decision regarding the 74.95 MWe Sendai-Gamo Biomass Project in Sendai, Miyagi Prefecture, Japan in which development is led by RENOVA through Morinomiyako Biomass G.K.
RENOVA operates its power generation business based on locally available renewable energy resources such as solar, biomass, wind, and geothermal energy. In biomass, the company is “accumulating its knowledge and experience” through the development and operation of the 20.5 MWe Akita Biomass Project that it joined in 2015 as well as the 75 MWe Kanda Biomass Project, the 74.8 MWe Tokushima Tsuda Biomass Project, and the 74.9 MWe Omaezakikou Biomass Project for which construction is underway.
RENOVA has reached financial close on the 74.95 MWe Sendai-Gamo Biomass Project and will work on the development together with four co-sponsors – United Purpose Management, Inc (25 percent share), Mizuho Leasing Co., Ltd (17 percent share), Sumitomo Forestry Co., Ltd (15 percent share), and Daiwa Energy & Infrastructure Co., Ltd (14 percent share) – to increase the corporate value of the biomass power project.
RENOVA, which has a 29 percent share in the venture, also holds the right to additionally acquire a total of 31.0 percent equity in the special purpose company owned by co-sponsors Mizuho Leasing and RenoDa Partners G.K, a Daiwa Securities Group company, on or after the date of completion of the Sendai-Gamo Biomass Power Plant.
This is in accordance with the Memorandum of Understanding on Transfer of Equity Related to Morinomiyako Biomass Energy GK that RENOVA has entered into with the two companies (Mizuho Leasing Co., Ltd. and RenoDa Partners G.K respectively). In the event of exercising this right, RENOVA’s ownership interest will be 60.0 percent.
Using wood pellets and palm kernel shells (PKS) as fuel, the plant will generate electricity for the grid under the JPY 24 per kWh feed-in tariff (FIT) rate. Plant design work has commenced with full construction scheduled to begin in February 2021 and with operations estimated to begin in November 2023.
The financial close led to the formation of a project finance syndicate with Resona Bank Ltd and Sumitomo Mitsui Trust Bank Ltd as lead managers and The Akita Bank Ltd, The Bank of Iwate Ltd, The Bank of Yokohama Ltd, The Iyo Bank Ltd, The Shizuoka Bank Ltd, The Yamaguchi Bank Ltd, Ugo Shinkin Bank, The Shoko Chukin Bank Ltd, Asahi Mutual Life Insurance Company, and JA Mitsui Leasing, Ltd as the mezzanine lender.