July 15, 2014

Deutsche Bank makes a strong commitment to renewable energy development in Japan

Deutsche Bank have announced the largest solar financing by a foreign bank in Japan, signaling their intention to support an additional three to six projects in the next 12 to 18 months.

Deutsche Bank AG Tokyo Branch, in conjunction with the Structured Finance Energy and Infrastructure teams in London and Singapore, have announced the largest solar financing by a foreign bank in Japan and the largest solar financing provided to a foreign sponsor. This announcement signals Deutsche Bank’s intention to support an additional three to six projects in the next 12 to 18 months.

A JPY11.2bn (€81mn) non-recourse construction loan facility has been signed with Gestamp Solar to be used for the construction of a large-scale 31.6 megawatt (MW) solar photovoltaic (PV) plant in Japan. Gestamp Solar will construct the solar PV plant on a 40-hectare plot on a former golf course in Ibaraki Prefecture, and plans to generate enough power for 10,000 households once it begins operating by April 2015. Gestamp Solar is the photovoltaic energy division of Gestamp Renewables, and is focused on the development, construction, operation and maintenance of solar power plants in the United States, India, South Africa, Latin America, China, Japan, Italy, France and Spain. To-date it has developed over 500MW of solar energy projects globally.

The non-recourse loan is backed by the revenue from the plant's power generation. Most financing for domestic solar projects is provided through recourse loans predicated on the creditworthiness of the key players involved. This transaction between Gestamp Solar and Deutsche Bank will be the first in a series of international standard non-recourse solar project finance transactions in Japan between the two parties. Deutsche Bank is in advanced discussions with other foreign solar developers to provide financing for their Japanese projects.

Global commitment to be at the forefront of renewable energy financing

Simon Roue, Head of Corporate Finance, Deutsche Bank AG Tokyo Branch said, "As part of Deutsche Bank's ongoing global commitment to be at the forefront of renewable energy financing, DB AG Tokyo Branch is now able to offer clients both construction financing and competitive long-term solar financing solutions that support the government's commitment to developing its longer-term energy strategy."

A feed-in tariff for renewable energy came into effect in Japan in 2012 in a shift in Japan's energy strategy after the incident at the Fukushima nuclear plant, guaranteeing a set price for electricity based on the mode of power generation. With the promise of stable revenue, more foreign companies are entering the Japanese solar energy market, and Japan is expected to add the most solar power capacity in the world this year, according to Bloomberg New Energy Finance. Renewable energy accounts for less than 11 percent of Japan's total energy production, compared with 31 percent in Germany.

Deutsche Bank’s efforts to finance renewable energy was awarded Infrastructure Journal’s Mandated Lead Arranger of the Year in 2013 and the Bank was the largest non-Asian private sector renewable energy financier in 2013 according to Bloomberg New Energy Finance. DB was involved in financing more than 1,185 MW of renewable energy projects in North and South America and Europe, supporting projects worth more than US $3.6 billion with US$1.2bn of our own capital.

Deutsche Bank’s 2014 solar market outlook predicts that we are in the midst of the second solar energy ‘gold rush’. Our analysis is that solar is currently competitive without subsidies in at least 19 markets globally and we expect more markets to reach grid parity as system prices decline further.

Saubere Energie

“As part of Deutsche Bank's ongoing global com­mit­ment to be at the fore­front of re­new­able energy fi­nan­cing, DB AG Tokyo Branch is now able to offer clients both con­struc­tion fi­nan­cing and com­pe­ti­tive long-­term solar fi­nan­cing so­lu­tions that support the govern­ment's com­mit­ment to de­ve­lop­ing its longer-­term energy stra­tegy.”

Simon Roue Head of Corporate Finance, Deutsche Bank AG Tokyo Branch

Clean Energy

10,000 households

are due to be supplied with clean energy from the planned solar PV plant once it begins operating by April 2015.

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