Mitsubishi Research Institute to launch Japan solar fund

The $422m vehicle will look to acquire and turn around poorly performing utility-scale assets in Japan.

Mitsubishi Research Institute (MRI), the consulting unit of Japan's Mitsubishi Group, is teaming with corporate affiliate Mitsubishi UFJ Morgan Stanley to launch a JPY50 billion (€380 million; $422 million) fund targeting mega-sized solar farms. 

MRI will oversee asset management for the fund and create a special purpose company for each project it deems profitable, while Mitsubishi UFJ Morgan Stanley's role will be to solicit investment from pension funds and other domestic institutional investors, according to a Nikkei Asia Review report. 

The fund will be invested in more than 10 power plants over three years with a combined generating capacity of at least 100 megawatts (MW). 

It is understood that MRI is currently involved in two solar projects in Kumamoto and Hyogo prefectures. It hopes to build know-how through the new fund that it will then apply through its consulting services in energy and other sectors in the future. 

Large-scale solar plants with a combined output capacity of about 20 gigawatts (GW) have come online under the nation’s feed-in tariff scheme, according to the report. However, many of the facilities have fallen short of their expected generating capacity due to cheap solar cells or poor maintenance, and are now back on the market long before the 20-year programme expires. 

The Ministry of Economy, Trade and Industry has approved 79.76GW of solar projects since the introduction of the feed-in scheme in July 2012. About 29 percent of that capacity went online, according to the ministry. 

The projects currently under development in Japan are facing a double whammy of challenges that comprise a tariff cuts and insufficient grid capacity.