Canadian Solar issues second dual-tranche project bond

17 November 2017 - 12:00 am UTC

Canadian Solar raised JPY 7.4bn (USD 66m) in its second dual-tenor green project bond to finance its 27.3MW solar power plant in the Tottori Prefecture of western Japan, it said yesterday.

The project bond matures in 1.5 years but may be extended to 18.3 years. The asset-backed non-recourse bond was issued at par and pays a fixed coupon of 1.2725% per annum during the initial tenor and, if extended, 1.3113% per annum thereafter. Goldman Sachs Japan acted as the arranger and Hitachi Capital Trust was appointed as trustee.      

It is structured so that repayments can be flexible, and allows for the solar project to be spun into the Canadian Solar Infrastructure Fund, which made a debut on the Tokyo Stock Exchange 30 October.

The company said Tottori Solar Power Plant kicked off commercial operations in August 2017 and the power is currently being sold to Chugoku Electric Power for JPY 40 per kWh under the nation’s feed-in tariff (FiT) system.        

“Investors recognize our strong record of building high quality and bankable solar power projects. This project will contribute to the growth of Canadian Solar Infrastructure Fund as a leading renewable energy fund in Japan,” Shawn Qu, the company’s chairman and chief executive, said in a statement.    

Canadian Solar Asset Management Japan chief executive Yoshihisa Otake said that the infrastructure fund aims to boost its asset value to JPY 100bn by 2020 – up from JPY 30bn at present – by acquiring solar assets from its sponsor. In Japan it owns 13 solar parks with a combined capacity of 72.2MW.

Canadian solar’s fund already holds more assets than the three renewable funds that listed on the Tokyo bourse before it, which have a combined capacity of 100MW.