Etrion Corporation announced today the signing of a project finance agreement with Sumitomo Mitsui Trust Bank, Limited ("SuMi Trust") for the construction of the 13.2MW Komatsu solar project located in the Ishikawa Prefecture of Japan.
Marco A. Northland, Etrion's Chief Executive Officer, commented: "I am delighted to announce the signing of the $33 million project financing for our 13.2MW Komatsu project, our fourth utility-scale solar project in Japan. We continue to deliver new solar projects through our unique partnership with Hitachi High-Tech in Japan, which is the market with the highest returns for Etrion. Once we close the previously announced sale of our Italian assets we will be in a very strong financial position to further accelerate our growth in Japan."
Komatsu is a 13.2MW solar PV power plant to be built on one site in the Ishikawa Prefecture of Japan. Construction-related works are expected to begin in February 2017, and the solar project is expected to be fully operational by the second quarter of 2018. The solar power plant will be built on 30.5 hectares of leased land and will connect through the Hokuriku Electric Power Co., Inc. ("Hokuriku Electric Power utility"). The project company will enter into a twenty-year power purchase agreement ("PPA") with the Hokuriku Electric Power utility and will receive ¥32 per kWh of electricity produced (approximately US$0.32 per kWh). Once operational, Komatsu is expected to produce approximately 14.2GWh of solar electricity per year, enough to supply 4,000 households.
Etrion will own 85.1% of the Komatsu project, and Hitachi High-Technologies will own the remaining 14.9%. The total project cost will be financed approximately 83% through project debt from SuMi Trust in Japanese Yen with a tenor equal to the construction period plus 19 years of operations. The remaining 17% of total project cost will be funded pro-rata by Etrion and Hitachi High-Technologies according to their respective equity interests.