Although the project features regional contribution measures that no one else but an environmental venture can come up with, the mega-solar power plant cannot be constructed without raising funds for the project. The reason why Renova, who only logged consolidated sales of ¥4.3 billion for the fiscal year ended May 2013, could lead a mega-solar power plant project worth as much as ¥4 billion in total was its success in structuring project finance.
Behind the success were the fact that Renova secured a project IRR (internal rate of return) of 7 to 8% through efficient procurement and construction that leveraged the advantage of scale as well as a fixed purchase price of ¥40 (before tax). Of the project costs of roughly ¥4 billion, Mizuho Bank Ltd loaned 90%.
Even so, the debt service coverage ratio (DSCR) reached 1.5x. The DSCR is the rate of cash flow available to meet interest and principal payments on debt, and is a benchmark for the borrower's annual debt servicing ability. A DSCR of 1.5x indicates that the amount of cash flow calculated by deducting tax, dues and costs from net income is 1.5 times the amount of principal and interest payments on debt.
Visit to solar panel plant in China to confirm production management
With regard to engineering, procurement and construction (EPC), consideration was paid to bankability (loan eligibility). EPC services as well as operation and maintenance were entrusted to Toko Electrical Construction Co Ltd, which boasts experience in mega-solar power plant construction.
Solar panels manufactured by Chinese Yingli Green Energy Holdings Co Ltd, which held the largest global market share in 2012 (Fig. 5), and PV inverters manufactured by Toshiba Mitsubishi-Electric Industrial Systems Corp (TMEIC) (Fig. 6) were chosen. Also, an on-ground-type foundation (Fig. 7), which is a concrete secondary product, was deployed. TMEIC's PV inverters boast excellent results, and their reliability is highly appreciated.
As to solar panels, "We confirmed quality management and inspection in the production process, actually visiting Yingli plants in Baoding City, China," Kiminami said.
Since completion in February 2014, "The plant has been operating smoothly with the amount of power generation reaching 10% more than expected," he said. The new company name Renova means "renew" in Latin, and "to make the environment newer" has been advocated as a corporate philosophy. The Roadside Station Itako peripheral, which drifted about in terms of land use, has established itself as Suigo Itako Solar and is bringing about a new environment to Itako City.