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Solar Thermal Power Project in Spain

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Providing Financial Support for a Solar Thermal Power Project

Solar Thermal Power Highly Effective in Reducing CO2 Emissions

As substitutes for fossil fuels and solutions for the problem of global warming, solar power, wind power, and other forms of renewable energy have gathered attention across the world. Mizuho is providing financial support for renewable energy initiatives as an element of its social mission as a financial institution.

MHCB has assembled its "Renewable Energy and Carbon Business Team" to specialize in project finance for the construction of electric power plants using renewable energy. In recent years, the team has turned its attention in particular to solar thermal power plants, which are extremely effective in reducing CO2 emissions, and is actively working to support their construction.

Solar thermal power plants require abundant sunlight, broad expanses of flat land, high air temperature, and a plentiful supply of water. And, whereas large solar power plants can generate power on the order of several megawatts, solar thermal power plants, using the same area of land, can generate power on the order of several tens of megawatts, and to that extent are highly effective in reducing CO2 emissions. In addition, solar thermal power plants can produce power that is easier to use partly because it is alternating–current power that is compatible with the power transmission networks of existing power companies. Solar power plants, in contrast, produce direct–current power that must be converted to alternating current before transmission.

Countries and regions where the right conditions are in place support the propagation of solar thermal power through the use of subsidies and other means. In Spain, a country blessed with copious amounts of sunlight, several projects are underway. Since the financing of Spain's Solacor solar thermal power project in August 2010, MHCB has undertaken project finance projects for four additional Spanish solar thermal power projects, making it one of Japan's leading financial institutions in this field.

Participating Actively in the Operations of Japanese Corporations in European Solar Thermal Power Projects

In March 2011, MHCB signed on as a Joint Managed Lead Arranger/Facility Agent for the project finance deal involving Spain's Guzman solar thermal power project. In this project, Mitsui & Co. and FCC (Fomento de Construcciones y Contratas), Spain's number one general contractor, will build a solar thermal power plant capable of generating approximately 50 megawatt of power (enough to service around 26,000 households) in the outskirts of the southern Spanish city of Cordoba. This project is now the focus of attention as one of several solar thermal projects in Europe in which Japanese corporations are involved.

Spanish solar thermal power projects financed by Mizuho


Solacor solar thermal power plant (Courtesy of Abengoa Solar)


Overhead view of the Solacor solar thermal power plant (Courtesy of Abengoa Solar)

Internationally Acclaimed Advanced Deal Arrangement Know–How

MHCB has built its substantial track record of success on its internationally acclaimed advanced deal arrangement know–how. Large projects like power generation plants involve governments, equipment manufacturers, plant engineering firms, and various other stakeholders, and, from planning through plant delivery, require years to complete. Success for projects that have these characteristics and will also rely on operating cash flow to repay debt requires coordination with meticulous foresight for identifying risks associated with developments like material cost fluctuations, legal revisions, and changes in subsidy schemes, and the ability to distribute and adjust risks among stakeholders. MHCB, having pioneered novel project finance deals for solar power, wind power, and solar thermal power, has also led the industry in the development of risk adjustment know–how. MHCB has functioned as an agent for numerous large–scale international projects.

Manager's Comments


Ken Furukawa
Senior Vice President, Head of Renewable Energy and Carbon Business Team, Global Structured Finance Division,
Mizuho Corporate Bank

Augmenting and Refining Strengths Born of Leadership, and Building on Our Solid Presence in Environmental Projects

In project finance, where financing is based on the revenues generated by the project, it is essential to identify as many potential risks that may arise until the period up through the completion of project as possible, and create ahead of time systems capable of appropriate risk diversification. The greater the project experience, therefore, the keener the eye for recognizing risks. In other words, for MHCB, which has developed know–how and accumulated project experience ahead of its competitors, solar thermal power is an area where it can exercise strengths to a degree competitors cannot. Going forward, Mizuho will continue to augment and refine its know–how and build an even more solid presence in the growing number of renewable energy projects being planned for various locations across the globe.

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