Equis Funds to invest $500 mln in Japanese solar projects

TOKYO Thu Feb 13, 2014 2:31am EST

TOKYO Feb 13 (Reuters) - Alternative energy investment firm Equis Funds Group plans to raise $500 million over the next year to fund solar energy projects in Japan where the use of renewable energy is expected to at least double over the next 15 years.

Equis has already collected funds from foreign investors keen to tap a rare opportunity to invest in Japanese infrastructure, a sector largely financed by domestic corporations, company partner Adam Ballin said on Wednesday.

Equis is also planning to seek funding from Japan's pension funds and retail investors, he told Reuters in an interview. Last month, it raised $250 million to fund Japanese solar plant builder Nippon Renewable Energy.

"The Japanese market in the future could prove to be an important market because the country is undergoing what we call an energy revolution," Ballin said.

Renewable energy currently accounts for about 10 percent of Japan's total energy mix and the Ministry of Economy, Trade and Industry had said it expects this share to rise to around 21 percent by 2030.

Japan is forecast this year to install the largest number of solar panels in the world after China, according to energy research firm IHS, as the government tries to replace the nuclear power it shut off after the 2011 Fukushima disaster.

A 2012 government policy that guarantees generous payments to companies selling renewable energy has also spurred the boom in solar demand.

China and Japan are expected to account for up to 45 percent of the 40.8 gigawatts of solar panels that will be installed globally this year.

Singapore-based Equis, set up by former Macquarie Group executives, is one of a few foreign financial institutions investing in Japan's solar industry.

Goldman Sachs has set up a company to run solar plants in Japan and said it plans to invest about 50 billion yen ($488 million) in renewable energy projects over the next four years.

Several domestic firms like telecom conglomerate Softbank Corp and energy trading houses are already financing renewable energy projects.

Equis-funded Nippon Renewable Energy is building four solar energy plants and had another 26 plants planned. The total cost of the 30 plants, which would generate 600 megawatts, would be around $1.8 billion, Ballin said.

The Equis Japan fund is co-led by an asset manager Partners Group. It is also funded by Babson Capital, pension fund managers for employees at Qantas Airways Ltd and the government of Australia's Queensland state.

($1 = 102.3800 Japanese yen)

(Editing by Miral Fahmy)

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