Special Report: Offshore Wind Power Project in Japan

Kitakyushu-Hibikinada Offshore Wind Farm

Mizuho Bank, Ltd. (“Mizuho”), MUFG Bank, Ltd. (“MUFG”), and the Development Bank of Japan, Inc. (“DBJ”) have jointly arranged project financing (the “Finance”) for the Kitakyushu- Hibikinada Offshore Wind Farm (the “Project”).

The Project involves the construction and operation of 25 bottom-fixed offshore wind turbines in the Hibikinada area at the Port of Kitakyushu, Fukuoka, Japan, to supply zero-emission electricity for 20 years. 9.6MW class large-scale wind turbine generators will be installed for the first time in Japan. The 220MW wind farm capacity will be the largest in the country.

Hibiki Wind Energy Co., Ltd. is the project company, which was awarded the right to develop the Project by the City of Kitakyushu in 2017, sponsored by Kyuden Mirai Energy Company, Incorporated, Electric Power Development Co.,Ltd. (J-POWER), Hokutaku Co.,Ltd, Saibu Gas Co.,Ltd. and Kyudenko Corporation.

Mori Hamada & Matsumoto (MHM) is the legal counsel to lenders for the Finance. We, making use of our experience in the first large-scale and commercial-basis offshore wind power project in Japan, provided the lenders with the following legal services:

✔ consider contract schemes for the Project
✔ review project agreements
✔ draft and review financing documents for the project finance
✔ consider other legal issues affecting the project

Project Outline

Project name	Kitakyushu-Hibikinada Offshore Wind Farm
Project company	Hibiki Wind Energy, Co., Ltd.
Sponsors	Kyuden Mirai Energy Co., Inc. 30%
	Electric Power Development Co., Ltd. (J-POWER) 40%
	Hokutaku Co., Ltd. 10%
	Saibu Gas Co., Ltd. 10%
	Kyudenko Corporation 10%
Project location	Hibikinada area, the Port of Kitakyushu, Fukuoka, Japan
Capacity	220MW
Wind turbine	25 wind turbine generators (9.6MW class)

Finance outline

Arrangers	Mizuho, MUFG and DBJ
Lenders	Mizuho, MUFG, DBJ and 34 other financial institutions
Signing Date	March 1, 2023

MHM team

Takahiro Kobayashi, Hironobu Noma, Shuhei Takaishi, Konosuke Seto, Eiki Okuda

Offshore Wind Farm Project at Akita Port and Noshiro Port in Akita Prefecture

On 3 February 2020, Akita Offshore Wind Corporation (AOW) executed a loan agreement with several lenders to finance AOW’s construction, operation, and maintenance of two offshore wind farms at Akita Port and Noshiro Port in Akita Prefecture. The project is expected to be the first large-scale and commercial-basis offshore wind power project in Japan.

AOW is a special purpose company jointly sponsored by Marubeni Corporation, Obayashi Corporation, Tohoku Sustainable & Renewable Energy Co., Inc., Cosmo Eco Power Co., Ltd., The Kansai Electric Power Co., Inc., Chubu Electric Power Co., Inc., The Akita Bank, Ltd., Ohmori Co., Ltd., Sawakigumi Corporation, Kyowa Oil Co., Ltd., Katokensetsu Co., Ltd., Kanpu Co., Ltd., and Sankyo Co., Ltd.

The project has a total output capacity of approximately 140MW, and will supply power to Tohoku Electric Power Co., Inc. for 20 years under the feed-in tariff programme. The loan for the project is the first project finance for offshore wind projects in Japan, and will be provided by multiple Japanese and foreign financial institutions.

Mori Hamada & Matsumoto (MHM) is legal counsel to AOW and the sponsors for the project, from the early stages of the feasibility study and through to the project financing. We provided AOW and the sponsors with the following legal services:

✔ consider contract schemes for the Project
✔ assist in applications for permits and negotiation with authorities and local stakeholders
✔ draft and review project agreements
✔ draft and review financing documents for the project finance
✔ provide legal advice regarding general corporate matters
✔ consider other legal issues affecting the project

MHM has accumulated experience by working on many pioneering projects in the areas of renewable energy and project finance. We have built up our capability to handle offshore wind projects, which are expected to become one of the main power sources in Japan, by utilizing our extensive experience in the renewable energy space, collecting knowledge from overseas, and rendering advice that takes the country’s business and legal practices into account. Our work on this project – as the first large-scale and commercial-basis offshore wind power project in Japan – is another pioneering contribution to the development of the offshore wind industry.

Project Outline

Project Company: Akita Offshore Wind Corporation
(Representative: Keiji Okagaki, President and CEO)
Site Location: Akita Port and Noshiro Port in Akita Prefecture
Installed Capacity: Approximately 140MW
Project Cost: Approximately 100 billion Japanese Yen
Generation Type: Bottom-fixed offshore wind farm
Off-taker: Tohoku Electric Power Co., Inc.
Commercial Operation: Scheduled in 2022
Duration of PPA: 20 years