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GE Unit, Pacifico Energy to Build 2nd Solar Plant in Japan

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GE Energy Financial Services, a unit of General Electric Company (GE) which funds energy infrastructure projects, strengthened its presence in the Japanese renewable energy market with an agreement to build the 42MW Mimasaka Musashi solar plant in Japan in collaboration with Tokyo-based Pacifico Energy.

The GE unit and Virginia Solar Group have both invested in the plant. The funding was executed on a non–recourse project finance basis and was backed by a ¥13billion ($109.2 million) credit facility from the Bank of Tokyo-Mitsubishi UFJ and Chugoku Bank. Additional financial details were kept under wraps.

The solar project will be built on a former golf course in Mimasaka, Okayama prefecture, and will use PV (photovoltaic) panels and inverters from Yingli Green Energy Holding Co. Ltd. (YGE) and Toshiba Mitsubishi Electric Industrial Systems Corp. (a joint venture of Toshiba and Mitsubishi).

Pacifico Energy, a utility-scale solar project developer and subsidiary of Virginia Solar Group, will manage construction and operations while the construction company on the project is Toyo Engineering Corporation.

The facility is expected to begin commercial operations in the third quarter of 2016 and will sell its power to Chugoku Electric under a 20-year power purchase contract at a fixed tariff rate.

Mimasaka is the second joint venture of GE Energy Financial Services and Pacifico Energy and the former’s third solar project in Japan this year. Previously, GE and Pacifico Energy collaborated on the Kumenan solar project in June, and in September GE aided in financing Japan’s largest solar project, which is being built in Setouchi City.

Solar companies are reaping the benefits of power subsidies in Japan, which is counting on solar power to help meet the supply deficit after the Fukushima disaster in 2011 shook public confidence in nuclear energy. Japan is striving to attain a diversified power mix and seeks to generate 20% of its power from renewable sources by 2020.

Renewable power is GE Energy Financial Services’ fastest-growing energy market. The unit has already invested over $1.8 billion in debt and equity investments in more than 1 gigawatt of solar power worldwide, and intends to invest $1 billion on renewable energy every year.

GE presently sports a Zacks Rank #3 (Hold). Some better-ranked conglomerates that are worth a look now include Federal Signal Corp. (FSS), carrying a Zacks Rank #1 (Strong Buy), and Carlisle Companies Incorporated (CSL), holding a Zacks Rank #2 (Buy).

Note: ¥1 = $0.0084

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