Nikkei reported on February 27 that Marubeni, a major Japanese trading and business conglomerate, acquired Taiwan’s solar project developer Chenya Energy for more than 10 billion yen (around NT$2.7 billion). This deal represents Marubeni’s successful entry into Taiwan’s renewable energy market.
Taiwan’s rapid progress in the adoption of renewable energies has attracted significant attention from multinational enterprises. Taiwan’s government currently aims to expand the island’s cumulative installed PV capacity to 6.5GW by 2020 and 20GW by 2025. These ambitious solar targets have brought forth enormous opportunities that are being pursued by companies and investors worldwide.
Marubeni actually places 11th in the ranking of coal power developers worldwide. However, with global warming becoming an increasingly serious issue, the risks associated with fossil fuel investments have also grown considerably. Marubeni officially changed its strategy in September 2018 with the announcement that it will reduce its net coal-fired capacity by half before the end of 2030. The conglomerate has also set the goal of raising the share of renewable energies in its net power supply from 10% in 2018 to 20% in 2023. From that point on, Marubeni no longer invests in the building of new coal-fired power plants. However, it does make exception to projects that adopt the ultra-supercritical steam boiler.
Marubeni previously focused mainly on the coal and natural gas segments of Taiwan’s energy market. When the government of Taiwan issued offshore wind tenders in 2018, Marubeni partnered with a local firm Taiwan Green Energy to make a bid for setting up a 600MW offshore wind farm. However, they were ultimately passed over in the selection process
The Chenya deal is Marubeni’s second and more effective attempt to break into Taiwan’s renewable energy market. From Chenya, the Japanese conglomerate will obtain expertise in the development of floating PV systems plus 270MW of power generation assets. All in all, this acquisition is vital in extending Marubeni’s reach in Asia’s energy market. Nikkei’s article also points out that many companies and investors from the West have already established a foothold in Taiwan’s renewable energy market. Thus, Marubeni’s approach will be to increase market share by participating in the development of various local projects.
Chenya has been concentrating its efforts on building medium- and large-scale PV power plants in Taiwan. Its entire stake was bought by I Squared Capital in 2017. The US-based private equity firm provided the capital injection that allowed Chenya to establish a plan to invest in the development of at least 500MW of PV capacity in Taiwan over the next three years. Aside from having installed many ground-mounted and rooftop systems, Chenya is also recognized for designing and setting up floating PV systems. It completed a 2.3MW floating solar project on Agongdian Reservoir in Kaohsiung in 2017 and is now constructing a larger one (180MW) on the waters off the Changhua Coastal Industrial Park. This latest project is scheduled for interconnection later in 2020.
I Squared Capital already stated that it has accepted the offer from Marubeni through its ISO Global Infrastructure Fund (I). Once the transfer of shares is concluded, Chenya will be a sole proprietorship wholly under the ownership of Marubeni.
Gautam Bhandari, Managing Partner at I Squared Capital, said that Chenya’s installed PV capacity soared from 2.3MW to 344.4MW in just three years under the guidance of his firm. Chenya has also seen a massive growth in its business portfolio, not only taking on numerous ground-mounted and rooftop projects but also leading the industry in the field of floating PV systems. Bhandari also noted that the floating solar project that the company is currently working on can be regarded as one of the world’s largest.
(News source: TechNews. Photo credit: Chenya Energy.)
