Marubeni Participates in South Korea's First Commercial Wind Power Generation Project

Sep. 24. 2004
Marubeni Corporation

Marubeni is now participating, alongside Korean firm Unison, in Korea's first commercial wind power generation project. The total cost of the project is about \6.5 billion, the site planned for construction is Gyeongsangbuk-do in southeastern South Korea, and total output is 40MW. Marubeni has already signed a shareholders agreement and non-recourse financing agreement, and plans to begin commercial operation in May next year. Marubeni will harness its experience in wind power generation projects to take on an advisory role in the project.

Since South Korea has previously lacked the systems to support renewable energies like wind power generation, it has never had any actual commercial wind power generation projects. However, in the second half of last year the South Korean Government indicated a policy of actively supporting such renewable energies as an anti-global warming measure, a support program was put in place and an environment enabling commercialization was established. This project is the first project where, under Korea's support program, the Korean Government will buy all electricity generated at a special price. Also, since Korea is a Clean Development Mechanism (CDM) country under the Kyoto Protocol, certified emission reductions (CER) trading as a result of future wind power generation projects is also expected.

Marubeni ranks overseas power generation IPP projects as a strategic area, and is actively involved in the development of high-quality power generation assets, notably in Asia and the Pacific. Also in South Korea, as a result of its takeover of Hong Kong-based Sithe Asia Holdings Ltd. and Korean affiliate Sithe Development Company Limited last year, Marubeni is establishing a presence as one of the few IPP players in South Korea. Furthermore, because there has been little actual wind power generation in South Korea, there is still much room for development, and Unison is in the process of developing a large number of promising future transactions. Marubeni judged that, besides promising stable revenue in the long-term, it was also an opportunity to expand CO2 CER business, and is considering also taking part in promising transactions now being developed by Unison.

Marubeni also plans to continue actively promoting low-CO2-emission power generation projects including gas, wind power, geothermal power and hydraulic power in countries besides Korea like Japan, Taiwan, Thailand, the Philippines, Indonesia and Australia.

Profile of venture company

Company  : Younduk  Wind  Power  Co., Ltd.
Capital : 15,700 million won (% of capital provided by Marubeni: 34%)
Output : About 40,000 kW (1,650kW x 24 turbines)
Sales Target : Korean power market (Price settlement under Government special price purchase program)
Sales Period : 15 years

Korean company: UNISON Co., Ltd.

Location : Cheonan City, Chungnam-Do, Korea
Representative: Chairman Lee Jeung-Soo
Date of Incorporation : September 1984 (Listed on South Korean OTC market  KOSDAQ November 1993)
Capital : 9 billion won
Main Business : Manufacturer of bridge construction and road-related equipment, developing South Korea's first system of domestically  produced wind power

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