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Canadian Solar completes $58M solar equity securitization in Japan

Canadian Solar Inc. closed its first solar equity securitization of $58.0 million backed by two long-term contracted projects in Japan.

The company raised the amount through Canadian Solar Securitized Green Equity Trust 1 from Japanese and Korean institutional investors, according to a Jan. 9 news release. Proceeds were used to purchase the 23.8-MWp Smart Solar Yamaguchi-Aio and 10.2-MWp CSJ Kamikitagun Rokunohemachi projects.

Canadian Solar said it recognized revenue from sale of in the third and fourth quarters of 2018.

The two projects have existing debts raised through a nonrecourse project bond structure developed using financial securitization techniques, which will mature in September 2037. "Since 2017, our Japanese asset management arm has rapidly expanded to manage over US$540 million of ESG investment platforms, including the TSE-listed Canadian Solar Infrastructure Fund," Canadian Solar Chairman and CEO Shawn Qu said in a statement.

The Smart Solar Yamaguchi-Aio project supplies energy to Tohoku Electric Power Co. Inc. at 33 cents/kWh, while the CSJ Kamikitagun Rokunohemachi project provides electricity to Chugoku Electric Power Co. Inc. at 37 cents/kWh under separate 20-year feed-in-tariff contracts.

Goldman Sachs Japan Co. Ltd. served as sole structuring agent and sole placement agent.