Aquila Capital completes divestment of second photovoltaic project in Japan
Aquila Capital has completed the development of a photovoltaic (PV) project in Japan with an installed capacity of 38.4 MWp and has sold it to a local institutional investor. Aquila Capital will manage the solar park for the duration of the term.
This is Aquila Capital's second project since establishing a presence in Japan in 2012 and it underlines the company's continuing commitment to this promising market. Aquila Capital focuses on acquiring PV projects at an early stage of development and further developing them from full approval or construction phase to sale.
The sale of the project to a leading pension fund means Aquila Capital has realised a multiple of 1.3 for its investors in the early phase, which corresponds to an Internal Rate of Return (IRR) of 11.6 percent after all costs.
Boris Beltermann, responsible for Aquila Capital's solar business in Japan, commented: "This investment reflects the current outlook in the Japanese photovoltaic market. Market-ready projects are particularly interesting for local institutional investors, so developing projects that already have secured feed-in tariffs is an attractive strategy for our investors."
More investments planned in Japan
The Japanese photovoltaic market remains active. Aquila Capital has built up resources and expertise in the country over the past few years and it will continue expanding its commitment. The company's strategy is to acquire early-stage PV projects with a volume of more than 150 MWp and develop them until they are sufficiently mature for sale.
Even though a new feed-in tariff (FIT) system will come into effect as of April 2017, high remuneration levels remain valid for numerous projects that have already received prior approval. Regarding the latest project, Aquila Capital secured an attractive FIT of 40 Yen per kilowatt-hour through the earlier acquisition of the property area on which the PV system was developed.
Japan: Stable, legal framework and high level of sunshine
Since the reactor catastrophe in Fukushima, Japan has conducted an energy system transformation. Since 2012, this has included the adoption of a remuneration system that is similar to the one established under the German Renewable Energy Sources Act.
Boris Beltermann added: "As in Germany, the feed-in tariff is financed from electricity levies on electricity customers. This creates stable, legal and economic conditions. In addition, Japan has a relatively high level of sunshine, which is comparable to southern Germany. These conditions have led to Japan being among the largest and most lucrative solar markets in the world next to the USA, China and Germany.
"Furthermore, compared to the approval processes in European solar markets, the development risk in Japan becomes comparatively low as soon as the land has been secured."
Strong network gives access to "off market" PV projects
In Japan, Aquila Capital cooperates closely with an established network of local partners.
About Aquila Capital
Aquila Capital develops innovative investment solutions for institutional investors worldwide. Since its founding in 2001, the owner-managed company is regarded as the trustee of its customers and has pursued a multi-disciplinary approach in the administration of property and financial market investments.
Customers of the Aquila Group are major institutional investors in Europe. More than 200 employees work at nine location worldwide to implement efficient investment strategies in fund structures and individual mandates. The Aquila Group includes both Aquila Capital investementgesellschaft mbH, licensed in Germany by BaFin as a service provider, as well as Alceda Fund Management S.A., licensed in Luxembourg by CSSF as an AIFM and UCITS Management Company.