Goldman Sachs Targets $1 Billion Renewable Energy Bond Arrangement to Expand Clean Energy in Japan
NEW YORK, May 26, 2015-- The Goldman Sachs Group, Inc. (NYSE: GS) today announced that it will target $1 billion of renewable energy bond arrangements to expand clean energy in Japan.
- First of its kind facility in Japan to bring together institutional investors and clean energy developers
- Provides institutional investors opportunity to invest in investment grade rated securitized renewable bonds
- Expands capital markets access and more efficient financing to clean energy developers
- Helps Japan diversify its energy mix and grow domestic clean energy
To play a greater catalytic role in funding the growth of renewable energy projects in Japan, we have developed the Japan Renewable Project Bond Trust.
The Trust will target $1 billion in investor capital within the coming few years and provide institutional investors with broader access to long-dated investment grade rated renewable energy bonds. The investor capital will enable the Trust to provide solar and other renewable project developers access to large-scale, more efficient capital market financings as an alternative to traditional domestic bank debt. While this structure is currently focused on solar energy, we will expand the Trust to other types of renewable energy assets as opportunities arise.
This target exemplifies Goldman Sachs’ continued commitment to supporting the development of renewable energy both in Japan and globally. In May 2012, we announced a target of financing and investing $40 billion in clean energy globally over the next decade. In August 2012, we helped establish "Japan Renewable Energy," a company specializing in renewable energy projects, to help address the country’s energy supply–demand imbalance by investing in solar and wind power opportunities.
In September 2013, we structured the first rated securitization of solar energy globally, through our JRE Mega Solar Project Bond Trust 1 ($13.5m, 20yr, rated A to BBB+ by Japan Credit Rating Agency). This transaction has led the way to the development of a pipeline of similar project bonds to more efficiently fund renewable energy throughout Japan, and sets the stage for expanding securitization of renewable energy projects globally.
“With the development of the Japan Renewable Project Bond Trust product, we are now able to offer renewable energy companies attractive rates of capital to fund their growth through the capital markets,” said Toru Inoue, Vice President in Structured Finance at Goldman Sachs.
This trend also aligns with broader investor interest for environmentally-focused investing. As an example, the emergence of “Green Bonds” have brought a greater focus on sustainability to fixed income markets and attracted institutional investor capital.
“Environmentally-focused investments such as Renewable Project Bonds well suit our investment philosophy as they match the highly social and public nature of our business. Since the establishment of our ‘Credit Investment Department’ last year, we have actively been engaged in these types of investments on a global basis, and will continue to do so in order to further enhance our policyholders’ best interest,” said Yasutoyo Takada, General Manager of Credit Investment Department at Nippon Life Insurance Company.
“We have been seeing an accelerating interest from investors in environmentally beneficial investments particularly those that have long dated, yield oriented cash flows. Being able to link the capital needs of growing renewable energy developers with this investor interest enables us to both serve the needs of our clients and play a catalytic role in deploying clean energy.” said Kyung-Ah Park, Head of Environmental Markets at Goldman Sachs.
For more information on Goldman Sachs’ environmental efforts, please contact below:
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