Canadian Solar's three-year, JPY18.5 billion ($120 million) 'green project bond' tapped into a wealth of Japanese financial institution investors to open access to a wider group of both loan and bond investors.

The deal, which was lead-arranged by Goldman Sachs Japan, also enabled it to plug into the ultra-low interest rate environment in Japan, where long-term, fixed-rate products are scarce.

The funds raised are to be used for solar and battery storage projects acquired, developed and operated by Canadian Solar.

As the financing was not assigned to any specific project, it offers Canadian Solar access to yen funding for flexible deployment across the company's global operations.

It was the 24th 'green project bond' arranged by Goldman Sachs in Japan. It has arranged more than JPY131 billion of renewable energy bonds in Japan.

A Sustainable Debt Awards judge commended the transaction, noting that, while "securitisations of solar assets are common in the market," the deal was additive because it enabled the issuer to tap into a wider pool of investors than it previously had done.

"Impacts based on geography are expected to be significant given Japan's relatively lagging approach to power decarbonisation among the world's most developed economies," one judge said, adding that the multi-asset structure, which "allows for smoothing of project-level profitability, is positive for facilitating investor interest in supporting solar projects".

Mao Ito, vice president of the Japan Structured Finance Group at Goldman Sachs, said: "Goldman Sachs is proud to be at the forefront of capital markets activity and innovation, both globally and in Japan. We are honored to continue the longstanding partnership with Canadian Solar to help them achieve their most important strategic and financing objectives."