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Japanese insurer duo co-finances domestic solar deals

The move comes nearly a year after the two century-old institutions formed a partnership to make co-investments in infrastructure projects.

Japan Post Insurance and Dai-ichi Life have co-financed two solar projects in Japan with over 10 billion yen ($88.3 million; €83.7 million) of joint investments, under a strategic alliance they announced last March. 

The joint investments made by the two insurers accounted for over half of the overall funds procured for each solar project, making them the “principal investors” in the projects, according to Dai-ichi Life. 

The investors will receive repayment from the two solar assets, one in the Tohoku region and the other in the Kanto region, as they sell electricity for a stable cash flow under the country’s feed-in tariff programme, for a tenor of slightly less than 20 years. 

The two insurers formed the strategic partnership last March in a bid to foster cooperation between their international life insurance and asset management businesses, in addition to carrying out joint research on improving domestic life insurance products.  

With regard to asset management, the pair said they have long been looking to make joint investments in infrastructure projects and other growth sectors. Their dedicated departments are working together to select attractive projects and assess various risks associated with the assets, they added. The partnership will also see their co-investment activities expand into areas beyond the infrastructure sector, Dai-ichi Life said. 

The life insurance arm of recently privatised conglomerate Japan Post has developed an “absolute-return multi-asset strategic fund”, as an instrument to capture stable income over the medium to long term in a low-interest environment. The insurer had total assets of 81.5 trillion yen as of last March, according to its annual report. 

For its part, Dai-ichi Life has been investing in infrastructure projects since 2013. It had total assets under management of 36.2 trillion yen as of last September. In addition to its partnership with Japan Post, the company invested €30 million in a German offshore wind farm early in 2017. The European deal is one of the nine infrastructure investments Dai-ichi Life has made over the last year. The insurer said it has invested over 100 billion yen in infrastructure deals as well as 10 aircraft finance transactions in 2016.

Last August, the company also set up a project finance vehicle with a size of 100 billion yen, targeting overseas infrastructure projects. The fund is managed by Mizuho Global Alternative Investments.