(Nikkei: January 13, 2016 – p. 13)
Japan Wind Development Co. will work with the Development Bank of Japan to launch Japan’s first fund that focuses on wind power generation in April. The fund will have an estimated scope of about 50 billion yen and will distribute investors’ profits earned from the sale of electricity generated from facilities it purchased from the utility. High initial costs on environmental assessments and other studies have been a major obstacle to launching business in the wind power generation sector. The diversification of fund procurement could help increase the number of wind power operators.
Japan Wind Development is the third largest wind power operator in Japan. It has a maximum output capacity of 200,000 kilowatts and generates slightly over 6% of the nation’s total wind power output.
The company will sell almost all of its facilities to the fund, which will solicit money from companies and institutional investors and distribute profits earned from the sale of electricity based on their stakes. The fund is projected to bring in relatively high profits from the sale of electricity due to the feed-in-tariff program and is expected to generate higher and more stable yields than real estate investment trusts.
The fund will be mostly financed by the Development Bank of Japan in the beginning. When it goes public in the future, it will be able to solicit money from retail investors.
Japan Wind Development, meanwhile, will develop new facilities that will have a combined output capacity of 3 million kilowatts over the next few years using profits earned from the sale of facilities to the fund. This accounts for 30% of the total wind power projects in Japan. (Abridged)