Japan Bank for International Cooperation (JBIC) signed, on March 19, 2007, a loan agreement totaling up to 37 million euros for the Kaliakra Wind Power Project, with Kaliakra Wind Power AD in Bulgaria, through co-financing with the Mizuho Corporate Bank. Investors in the project include Mitsubishi Heavy Industries Ltd.
The Kaliakra Wind Power Project is for the construction and operation of a 35-MW wind power plant in the Kaliakra district along the coast of the Black Sea. The power generated by the project will be sold to the state-owned electric utility, Nationalna Electricheska Kompania EAD, for 12 years. JBIC will offer a long-term loan for the necessary costs, using project finance, a financing scheme in which the loan is to be paid back mainly from the cashflow generated by the project rather than by the general assets or creditworthiness of the project owners.
This is the first instance of JBIC project financing for a wind power project. It also will become Japan's first Joint Implementation project under the Kyoto Mechanisms, if the project is approved by the Bulgarian government. Carbon credits to be generated from the project will be purchased by Japan Carbon Finance (established by JBIC, Japanese companies and other organizations), which will allow Japan to obtain carbon credits for the project. Revenues from carbon credits generated by the project will be added to project cash flows, improving the economic viability of the project.
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