Japan’s Shizen Energy has signed a 20-year Virtual Power Purchase Agreement (VPPA) with tech giant Microsoft for a solar project in Inuyama City, Aichi Prefecture.
This is Microsoft’s first VPPA in Japan and the largest single-asset solar power plant contracted under a corporate VPPA in Japan to reach financial close. The project has been financed by Societe Generale.
The VPPA, which represents a long-term commitment similar to other power purchase agreements (PPAs) Microsoft has signed globally, was instrumental in helping Shizen Energy achieve financial close on the Inuyama project.
This is Microsoft’s first PPA in the country, helps add clean energy to the electricity grid, and supports Microsoft’s goals of achieving 100% renewable energy by 2025. The Inuyama City project is the largest single-asset solar power plant to be contracted under a virtual corporate PPA in Japan to reach financial close and is scheduled to start operation in December 2023.
The development and construction of the project have been financed by non-recourse finance in the amount of ¥10.9 billion from Societe Generale. This is the first case of non-recourse project finance being used for the combination of a VPPA in Japan for the sale of non-fossil fuel certificates (NFCs) and long-term contracted electricity sales including balancing.
“Shizen Energy’s expertise and presence in the Japanese market is enabling our first renewable energy purchase in Japan and it’s great to see near-term supply for our 100% renewable energy goal,” said Adrian Anderson, General Manager, Renewable and Carbon Free Energy at Microsoft.