Partners, Equis ink $250m Japan solar deal

The two fund managers are hoping that the first plants developed out of the JV will be operational before the end of the year.

Zug, Switzerland-based Partners Group and Singapore-based Equis Funds Group have led a consortium of investors in a $250 million investment dedicated to the development of utility-scale solar power plants across Japan, the first solar deal in Japan for both firms, according to a joint statement.

Partners and Equis are joined by Babson Capital, LGsuper and Qantas Superannuation. The new platform will also partner with one of Japan’s largest independent solar utility businesses, Nippon Renewable Energy (NRE), which already owns a 300- megawatt (MW) pipeline of Japanese solar projects that it expects to develop over the next two years.

For this year specifically, NRE has already contracted four projects totaling 48MW that are expected to begin construction as soon as paperwork processes are cleared. An additional 110MW of projects are expected to follow in 2014, and the first plants are expected to start generating electricity in the second half of the year.

“We are excited… to support the NRE management in filling the large power generation gap in Japan,” Benjamin Haan, managing director and head of Asia Pacific private infrastructure at Partners Group, said in the statement. “We are confident of additional investment opportunities in the near term that will offer our clients the opportunity to further contribute to sustainable energy development in Japan.”

The platform’s projects should be able to benefit from 20-year power purchase agreements under Japan’s Feed-in Tariff – which is about three times as generous as Germany’s tariff. The tariff was adopted by the government in 2009 to encourage investment in the sector, in the hope of providing renewable energy producers with stable cash flows.

“Being an early mover into Japanese renewable energy has resulted in a win-win-win relationship for Japanese communities, the Japanese government and investors,” David Russell, chief executive and partner at Equis Funds Group, said in the statement.

This is not the first time Equis and Partners have worked together on solar infrastructure. Equis established Soleq in 2012, a Southeast Asian solar platform which has constructed 10 solar farms in Southeast Asia to date and is developing a pipeline of projects in Thailand, Malaysia and the Philippines. Partners committed capital to the Soleq platform in June 2013 and stands to become the second largest shareholder once the capital is drawn.