MHI\'s Wind Power Generation Business Gets Underway in Bulgaria; ...

Tag : AES implementation

Tokyo, Aug 7, 2008 - (JCN Newswire) - Mitsubishi Heavy Industries,Ltd. (MHI) has commenced business in generating electric power bywind turbines in Bulgaria, and selling it locally, through KaliakraWind Power AD (KWP), a joint venture established locally with theBulgarian engineering firm inos Ltd. The wind farm, Bulgaria'sfirst, has already been built by KWP and is now in operation. Allelectricity produced will be sold to Natsionalna ElektricheskaKompania EAD (NEK), Bulgaria's state-owned electricity utility.

The Kaliakra wind power generation and sales project has beenplanned as a Japanese-Bulgarian Joint Implementation (JI)* projectto reduce greenhouse gases (GHG) sanctioned under the KyotoMechanisms framework. The project will simultaneously contribute tothe promotion of renewable energy utilization in Bulgaria and tothe acquisition of credits based on emission reduction units (ERU)by Japan.

The KWP wind farm, located at Kaliakra Cape on the Black Sea coast,incorporates 35 MWT62/1.0 wind turbines and has a capacity togenerate 35 megawatts (MW) of electricity. The wind turbines, eachhaving a rated power output of 1,000kW, were manufactured at MHI'sNagasaki Shipyard and Machinery Works and Yokohama Machinery Works.

MHI has coordinated construction of the farm and participates inits operation together with inos, the JV partner that performedcivil construction work and wind turbine installation, andMitsubishi Power Systems Europe, Ltd. (MPSE), the company'ssubsidiary in England for power systems business in Europe,

KWP was established in Sofia in late 2005 with MHI owning 70% andinos the remaining 30% (capitalization: Euro 10 million).Investment by MHI and a subordinated loan to KWP were arranged byMHI Investment International BV, MHI's wholly owned investmentcompany in the Netherlands. The project represents the firstinvestment into power generation in Bulgaria by a Japanese company.

Bulgaria, in line with joining the EU in January 2007, aims to meet11% of its total energy consumption needs with renewable energiesby 2010. MHI began investing into the Kaliakra project prior to thecountry's joining the EU, through cooperation provided by JapanBank for International Cooperation (JBIC). MHI's investment hasalso helped Bulgaria achieve an environment conducive to renewableenergy investments. The project was financed through a syndicatedloan furnished to Bulgaria by JBIC and Mizuho Corporate Bank inJapan. The total loan amount is approximately ?37 million.

The KWP project is expected, availing of wind power, to reducecarbon dioxide (CO2) emissions by some 85,000 tons annuallycompared to conventional thermal power generation. Of the emissioncredits obtained through the project, up to 350,000 tons will besold to Japan Carbon Finance, Ltd. (JCF), a company established byJBIC and major Japanese corporations in 2004. MHI will purchase anysurplus credit beyond 350,000 tons.

The Kaliakra wind farm project is MHI's second overseas powergeneration investment initiative. The first involved investment inAES Energia Cartagena S.R.L., an independent power producer (IPP)in Spain which signed with MHI in 2003 and commenced commercialoperations in 2006.

On the strength of its expanding track record in this area, goingforward MHI aims to vigorously develop more business schemes gearedtoward acquisition of carbon emission credits and, leveraging itsrecord in supplying power generation equipment, to expand itsparticipation in power generation business operations while furtherstrengthening its marketing of wind turbines in Europe.

* Note:Joint Implementation (JI) is a mechanism for obtainingemission credits under the Kyoto Protocol. Countries for whichnumerical targets have been set on GHG reduction jointly conductprojects that will reduce such emissions, and the projectparticipants obtain credits based on the amount of ERUs generatedby the project at hand. The Kaliakra project, once it wins approvalas a JI project, will help Japan to achieve the 6% GHG reductiontarget set for it under the Kyoto Protocol.



About Mitsubishi Heavy Industries

Mitsubishi Heavy Industries, Ltd. (TSE: 7011, 'MHI'), headquarteredin Tokyo, Japan, is one of the world's leading heavy machinerymanufacturers, with consolidated sales of 3,068 billion yen infiscal 2006 (year ended March 31, 2007). MHI's diverse lineup ofproducts and services encompasses shipbuilding, power plants,chemical plants, environmental equipment, steel structures,industrial and general machinery, aircraft, space rocketry andair-conditioning systems. For more information, please visit theMHI website at http://www.mhi.co.jp

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