US investment banking giant Goldman Sachs said Monday it will start investing in Japanese renewable energy projects, with a reported $2.9 billion outlay over the next five years.
The injection comes after Japan’s government stepped into the green power market to set minimum prices in a bid to encourage the sector as the country seeks to rebalance its post-Fukushima energy mix.
A wholly owned unit in Tokyo said it will invest in a solar power generation project in Ibaraki prefecture on the outskirts of Tokyo, which is due to start operation in January 2015.
The firm, Japan Renewable Energy, will put some 13 billion yen into the project, its first, which will have power generation capacity of 40 megawatt, a company spokesman said.
The Ibaraki project is just one of a number of ventures involving wind or solar that Japan Renewable Energy is part of in Japan, it said, with the business daily Nikkei saying it would pour up to 300 billion yen ($2.9 billion) into the sector over coming years.
Electricity generated at the Ibaraki facility will be supplied to major utility Tokyo ElectricPower (TEPCO)—the operator of the crippled Fukushima nuclear plant—over an expected span of about 20 years, it said.
Goldman Sachs has already invested in renewable energy firms in the United States and India.
Last year the government introduced a scheme that guaranteed generating companies a premium for the electricity produced from renewable sources and forced the country’s power monopolies to buy whatever was on sale over 20 years.