Japanese solar sets foreign investor precedent

Author: Ashley Lee | Published: 17 Jul 2014
Spain’s Gestamp Solar received ¥11.1 billion ($109 million) in non-recourse financing from Deutsche Bank for its first Japanese photovoltaic project. It is a rare case of a project having both a foreign lender and sponsor in the country.

Taking advantage of Japan’s favourable feed-in tariff (FIT), Gestamp plans to build a 31.6 megawatt (MW) project in Ibaraki prefecture.

Its financing was the largest-ever non-recourse solar financing in Japan. But to close the deal, it needed to overcome domestic challenges, particularly in relation to land rights.

More foreign lenders and sponsors are expected to follow both Gestamp and Deutsche Bank.

"Solar energy is the first infrastructure space in Japan that foreigners can enter on a more level playing field with the Japanese domestic supply chain, because everyone is still coming to terms on how it should work," said Joshua Isenberg, a partner at Paul Hastings.