Canadian Solar closes equity securitization in Japan backed by solar assets

Canadian Solar at a trade show

Canadian Solar has completed the closing of its first equity securitization in Japan — backed by long-term contracted solar assets.

Canadian Solar raised $58 million from a mix of Japanese and Korean institutional investors in its inaugural offering of equity backed securities.

Canadian Solar used the funds to acquire Canadian Solar’s 34MWp operating solar portfolio, comprising the 23.8MWp Smart Solar Yamaguchi-Aio Solar Power Plant and the 10.2MWp CSJ Kamikitagun Rokunohemachi Solar Power Plant.

Canadian Solar recognized revenue from sale of the plants in the third and fourth quarter of 2018.

Tohoku Electric Power and Chugoku Electric Power Company have under 20 years feed-in-tariff (FIT) contracts to buy electricity from the CSJ Kamikitagun Rokunohemachi solar power plant and the Smart Solar Yamaguchi Aio solar power plant for JPY36 or $0.33 and JPY40 or $0.37 per kWh, respectively.

Canadian Solar O&M Japan also provides Operations and Maintenance (O&M) services for the remaining duration of the 20 years FIT period. The two solar power plants utilize MaxPower modules supplied by Canadian Solar and began commercial operations in late 2016.

Since 2017, our Japanese asset management arm has expanded to manage over JPY 60 billion or $540 million of ESG investment platforms, including the TSE-listed Canadian Solar Infrastructure Fund,” said Shawn Qu, chief executive officer of Canadian Solar.

Goldman Sachs Japan acted as sole structuring agent and sole placement agent for the transaction.