Details on liability guarantees for geothermal projects in Japan
View to Mount Fuji at Nishi-Hirabatake Park, Japan (source: flickr/ TANAKA Juuyoh, creative commons)
Alexander Richter
2 Apr 2014
Japan's Ministry of Economy, Trade and Industry releases details on the recently announced liability guarantees for two geothermal projects through Japan Oil, Gas and Metals National Corporation (JOGMEC).
News this week reported on liability guarantees provided for two geothermal projects by the Japan Oil, Gas and Metals National Corporation (JOGMEC). The projects to receive those guarantees are Tsuchiyu Onsen, Fukushima City, Fukushima Prefecture and Kokonoe Town, Kusu County, Oita Prefecture. These are the first geothermal resource development projects to which JOGMEC provides liability guarantee.
The Ministry of Economy, Trade and Industry now provided details about those guarantees and the program.
1. Outline of JOGMEC’s liability guarantee program
Under its program for providing liability guarantees, JOGMEC guarantees the loans that private companies that develop geothermal resources borrow from private financial institutions when those companies attempt to construct a geothermal power plant and that need to be financed from such institutions as a fund for the development. Under this program, JOGMEC provides a liability guarantee for up to 80% of the total loan.*
*Note: JOGMEC liability guarantee program Aiming to assess the risk of geothermal resources development that is difficult to assess only by private financial institutions as well as to facilitate such institutions’ funding to private companies that intend to develop geothermal resources, JOGMEC guarantees the loans that the companies borrow from such institutes as the funds they need when they attempt to construct a geothermal power plant, up to 80% of the total fund (standard rates of liability guarantee: 0.4% per year).
2. Outline of the projects to which JOGMEC provides liability guarantee
Tsuchiyu Onsen Energy Corporation has decided to construct a geothermal power plant with a water-cooled binary system able to generate 400 kW of electricity at Tsuchiyu Onsen, Fukushima City, Fukushima Prefecture. The company has raised a part of the construction fund (557 million yen) from Fukushima Shinkin Bank as a long-term loan, and JOGMEC decided to guarantee 80% of the total loan.
NEECO Corporation has decided to build a geothermal power plant with an air-cooled binary system able to generate 5,000 kW of electricity at Kokonoe Town, Kusu County, Oita Prefecture.. The company has raised a part of the construction fund (4 billion yen) from Mizuho Bank, Ltd. and Nippon Life Insurance Company as a long-term loan, and JOGMEC decided to guarantee 80% of the total loan.
For details of these projects, see the Appendix (PDF:706KB) (in Japanese).
Source: Ministry of Economy, Trade and Industry (METI) via National Journal
