Baker and McKenzie advising on investments in Japanese biomass plant

Baker and McKenzie (Gaikokuho Joint Enterprise) is advising Renova and Kuni Umi Asset Management Co. (collectively the 'sponsors') on their plans to develop and invest in a woody biomass power plant with a generation capacity of 20MW in Mukaihama, Akita city, Akita, Japan. The plant will be the largest power generation facility of its kind, using woody biomass as fuel in Japan's Tohoku region.

This project will require an investment of approximately JPY12.5 billion (€98 million). Hokuto Bank and Shinsei Bank lead a syndicated loan with local financial institutions, which will cover a substantial portion of the project costs.

Green Finance Promotion Organization invested in preferred equity and Akita prefecture will provide an interest-free loan. The output will be sold to a power producer and supplier and Tohoku-Electric Power Co. The plant is projected to start operation from July 2016.

To ensure the stable supply of biomass fuel, which is essential for a woody biomass power project, not only will a pipeline of forest thinnings be established in cooperation with local forestry companies, but also palm kernel shell will be procured as supplementary fuel. Promoting regional development in Akita is expected, through an effective utilisation of unused wood in this project.

Naoaki Eguchi, head of the Tokyo office's Banking and Finance Practice Group, who lead the Baker and McKenzie's team, says: 'With the new feed-in tariff system announced in July 2012, it continues to be an exciting time for various renewables development, including but not limited to mega-solar projects. The field of woody biomass power generation is one of these areas with great potential.'


SOURCE: Baker & McKenzie

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