PwC Japan Renewable Energy Solutions www.pwc.com/jp

www.pwc.com/jp
PwC Japan
Renewable Energy
Solutions
Solution Overview:
Renewable Energy Solution
Feed-in tariffs for renewable
energy have been in effect since
July 1, 2012.
This is a guide to PwC Japan’s
range of services to support
clients in accessing the
opportunities in Japan’s
renewable energy sector.
About the Renewable Energy Solutions Group
PwC Japan, whose member firms include PricewaterhouseCoopers Aarata,
PricewaterhouseCoopers Co., Ltd., Zeirishi-Hojin PricewaterhouseCoopers, have
established the Renewable Energy Solutions Group. Our specialists, including
representatives from accounting, tax and advisory, and experts on the renewable
energy sector, work together to provide tailored solutions to address clients’ needs.
The group specialises in the provision of advisory services for business structuring,
modelling, structuring funds, financing, Public-Private Partnerships (PPPs),
sustainability and efficient tax structures needed for private-sector firms or local
governments operating renewable energy businesses. Clients gain access to the
groups range of expertise including members who have previously worked in
Japan’s power or gas sector and those holding energy management qualifications.
Clients also gain access to our global network of specialists in 157 countries,
including those with experience and technical expertise gained through the
provision of advisory services in some of the world’s leading renewable energy
markets, including Spain.
Please visit our website for further information on the latest trends in the renewable
energy sector, our services, and our seminars and events.
http://www.pwc.com/jp/e/renewable-energy/
Assurance
Structuring
Sustainability
Internal control
Laws and
regulations
Tax
Compliance
Renewable Energy
Solutions Group
Tax
Advisory
M&A
Modelling
PPP
Our Services Provided in Each Business Phase
PwC Japan provides a comprehensive range of services to support clients at each
stage of the renewable energy business, as shown in the following chart.
Tasks to be completed in
each phase
Our services
Feasibility
study and
business
planning
Business planning
Assessment of profitability
Financing arrangements
Preliminary consultation with
auditors
Internal approval
Assessment of potential project*
Assessment of legal formation of
the business
Analysis of accounting and tax
issues
Finance planning advisory
Financial modelling
Review of cash flow projection of
the operation
Support for preparing documents
for internal discussion
Assessment of the use of public
assets and PPP/ PFI schemes*
Business
structuring,
financing,
tender,
procurement
and
construction
Negotiation with relevant parties
and adjustments of structures
etc.
Discussion on accounting and
tax issues with relevant parties
Formation of entity and
operational structure
Obtaining final conclusion from
auditor
Preparation of engagement
letters
Exchanging contracts
Submission of bid proposal
Identifying bid specification/
soliciting bids*
Assigning operators/ exchanging
contracts*
Assessment of final structure
Assistance for formation of entity
(internal control, reporting process,
operation and management etc.)
Enhance information sharing
among stakeholders
Support for negotiating
non-limited recourse loan with
lenders
Assistance for discussion with
auditors
Review of engagement letters
from accounting/ tax point of view
Assistance for preparing proposals
and exchanging contracts
Assistance for deciding bid
specification/ soliciting bids*
Assistance for assigning
operators/ exchanging contracts*
Operation
and
management
Monitoring operation and
management
Recovery of funds
Comprehensive advice for
consistent accounting treatment
Audit of accounting, bookkeeping
and tax filing
Issuance of tax opinion
Preparation of various forms of
tax return
Additional
investment
and disposal
Assessment for modification,
expansion or reduction of
business
Assessment for selling beneficial
interests
Analysis and assessment of
accounting and tax issues in
modification, expansion or
reduction of business
Accounting and tax advisory
relating to increase or decrease
in beneficial interests
* Assuming tasks to be conducted at/ services provided for public sector
Working with clients across the
renewable energy value chain
Our expert teams can help you through
every stage of the renewable energy life
cycle from planning to the exit stage.
Details of Our Services
Eligibility for electricity price tariff
reductions or exemptions
PwC Japan experts advise on potential
tariff reductions or exemptions from the
renewable energy price tariffs.
Appropriate financial reporting and
accounting treatment
PwC Japan experts advise on J-GAAP,
US-GAAP and IFRS.
Sustainability
The Sustainability Services team in PricewaterhouseCoopers Aarata comprises of
certified public accountants and other professionals including professional
engineers, qualified energy managers and licensed electrical engineers. The team
provides services including project management for renewable energy business,
support for expanding overseas operations and research on domestic and
international renewable energy and sustainability markets and policies.
In Japan, a tariff will be added to the electricity price paid by consumers to cover
the cost of electricity generated from renewable energy sources. As a result of the
financial burden placed on large consumers of electricity from the tariff, reductions
or exemptions from the tariff are available to companies meeting specified criteria.
We advise clients on the potential for qualification for a tariff reduction or
exemption, as well as issuance of confirmation letters by certified public
accountants that are necessary in the tariff reduction or exemption application
process.
Accounting advisory
PricewaterhouseCoopers Aarata has a Financial Reporting Advisory department
that provides accounting advisory services to determine the appropriate investment
structure for companies in the renewable energy sector.
An approach adopted by clients investing in the renewable energy sector is the
establishment of SPEs (Special Purpose Entities). Our specialists can support clients
throughout the whole business cycle from the assessment of the appropriate
investment scheme to exiting from the investment. We also provide accounting
advisory services to clients for their investment and loans, as well as related
accounting areas. Our accounting advisory services cover not only Japanese
standards but also U.S. standards and International Financial Reporting Standards
(IFRS).
We also support administrative operations for the formation of limited liability
companies (LLCs) and general incorporated associations investing in LLCs, which
work as investment partnership, including operation management and company
closure.
Comparative analysis and
factors to consider when deciding
accounting treatment for
investment structures
We provide analysis based on examples
of both large and small–scale investments
in GK-TK, company limited, trust, TMK
or other structures, as well as their
comparative examination based on our
accounting expertise.
Advisory services for
accounting treatment of
investments and loans
Accounting
advisory services
Decision whether to consolidate SPEs
Accounting treatment of investments
and loans in investment structures
Decision whether to apply off-balance
sheet accounting to securitised assets
Support negotiation with other
participants on terms of the project, etc.
Tax
Zeirishi-Hojin PricewaterhouseCoopers provides extensive advisory services
covering a wide variety of tax issues entailed when implementing a renewable
energy project.
Our services at planning stage of a project include analyzing potential tax issues
related to a planned structure of the project, and reviewing cash flow projection;
and at execution stage, our support include identifying tax issues, consulting, tax
filing, issuing tax opinion and preparing various forms of tax return.
Modelling
PricewaterhouseCoopers Co., Ltd. has a dedicated modelling team specialised in
financial modelling, which provides support to domestic and international entities
that intend to invest in renewable energy businesses, as well as to financial
institutions that are planning to provide funds to such entities. Our support
includes building financial models for the valuation of investment and review of
models.
Professionals in the field of financial modelling, as well as experienced accounting
and tax specialists in the field of both domestic and international renewable energy
business, work in cooperation with each other to offer integrated service for
providing solutions to complicated and wide variety of issues of our clients.
Managing tax related issues
PwC Japan helps clients evaluate and
decide on the appropriate tax investment
structure.
Developing or reviewing financial
models
PwC Japan experts provide insightful
advice on valuation to support clients
financing needs.
PwC Japan’s PPP team is experienced in
infrastructure development in Japan and
globally.
PPP (Public-Private Partnerships) and
Infrastructure
PricewaterhouseCoopers Co., Ltd. has a specialist PPP & Infrastructure department
that provides a comprehensive range of services to support both public and private
sectors when implementing projects using public-private partnerships. Our
approach takes into consideration the public nature, economic and ecological
impacts of these types of projects.
Our specialists, who have supported some of the largest PPP/ PFI projects in Japan,
along with professionals experienced in collaborating with other PwC global
network firms for both the domestic and international renewable energy sector,
collaborate closely to offer advisory services supporting our clients in implementing
infrastructure and renewable energy projects that utilise public assets.
◆Our services for public sector
Support for assessing potential project
Feasibility studies for renewable energy projects using public assets (assessment of
operational structure, risk analysis, cash flow modelling etc.)
Assessment of the potential for the use of renewable energy in PPP/ PFI projects
Support for funding
Support in preparing bid specifications and soliciting bids for public sector renewable
energy projects
Support in assigning operators of public sector’s renewable energy project, preparing
contracts and monitoring operation managements after start-up
◆Our services for private sector
Support for assessing potential project and bid tendering
Implementation of feasibility studies
Support for proposal preparation (detailed review of proposal documents and preparation
of business plans)
Support for consortium formation and project management
Arranging project finance and cash flow modelling
Support following winning of contracts (negotiation and preparing contracts)
Support for participating in domestic and international renewable energy
businesses and projects
Support for participating in the domestic public sector’s renewable energy businesses
and projects
Support for Japanese companies participating in international renewable energy
businesses and projects
Financial statements audit
Audit of SPEs (Special Purpose
Entities)
PwC Japan has a team of experts
specializing in audits of SPEs
The Asset Management sector in PricewaterhouseCoopers Aarata has 160
professionals providing audit services to securities investment funds, real estate
investment funds, major Japanese and foreign asset management companies and
trust banks.
For some investments in the renewable energy sector that use investment funds,
lenders and investors often require auditing of funds, even though they are not
subject to statutory audit. Our experienced team of the Renewable Energy Solution
Group has in-depth knowledge of fund operations and can implement effective and
efficient audit programs that take into account of issues specific to the renewable
energy sector.
Our audit services cover not only Japanese standards but also U.S. standards and
International Financial Reporting Standards (IFRS).
Renewable energy funds
As a result of the feed-in tariff system establishing the purchase price and period for
renewable energy, clarity around the assumptions used in cash flow projection in
feasibility studies has increased. This contributes to the creation of a preferable
environment for investors and clients considering establishing investment funds.
PwC Japan provides services across the whole fund life cycle, including services
related to the selection and evaluation of investees, financing, fund establishment
and operation, as well as services related to unwinding the fund and exit strategies.
【Fund cycle and our services】
1. Services related
to selection and
evaluation of
investees
4. Services related
to unwinding
and exiting
strategies
Feasibility study,
market research
and business planning
Maturity
Operation and
maintenance
3. Services
related to fund
operation
Financing
Construction
2. Services related
to financing and
fund foundation
Project Experience
The following are some examples of PwC Japan experience demonstrating our
capabilities in the renewable energy sector.
Client
European solar power generator
Municipal government
Financial institution for international
development
Private-sector company
Foreign private-sector organization
Private-sector financial institution
Tokyo Stock Exchange
Private-sector financial institution
Electric utility company
Other private-sector companies
(domestic and international)
As of November 2012
Country
Our services
Tax advisory services for structure and
Japan
operational cash flow, review of contracts
Expert commissioner for conducting solar
Japan
power generating operation
Whole Asian Executive office for the promotion of broad
region
use of solar energy
Japan, U.S. Building cash flow models
Japan
Building cash flow models
Developing template for reviewing solar
Japan
power projects
Member of committee for studying
Japan
infrastructure fund
Japan
Accounting audit of renewable energy fund
Case research of renewable energy
Japan
operations, risk analysis
Tax advisory services for building structure
Japan
or acquiring interest in investment
About PwC Japan
PwC Japan represents PricewaterhouseCoopers Aarata, PricewaterhouseCoopers
Kyoto, PricewaterhouseCoopers Co., Ltd., Zeirishi-Hojin PricewaterhouseCoopers
and their subsidiaries. Each entity is a member firm of the PwC global network in
Japan, or their specified subsidiary, operating as a separate legal entity.
PwC Japan
Sumitomo Fudosan Shiodome Hamarikyu Bldg.
8-21-1 Ginza, Chuo-ku Tokyo 104-0061 Japan
TEL: 03-3546-8650
Contact:
[email protected]
© 2014 PricewaterhouseCoopers Aarata, PricewaterhouseCoopers Kyoto, PricewaterhouseCoopers Co., Ltd., Zeirishi-Hojin PricewaterhouseCoopers.
All rights reserved. PwC refers to the PwC network member firms in Japan and/or their specified subsidiaries, and may sometimes refer to the PwC
network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
C-APJP0057-S0114-01