ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that it is participating in the world’s largest wind farm, the 845-megawatt Shepherds Flat wind project under construction in Oregon, the United States, as part of its efforts to expand its renewable energy business worldwide.

The total cost of the project is approximately 2 billion U.S. dollars (approx. 160 billion yen). ITOCHU, together with Google Inc. and Sumitomo Corporation of America, agreed to jointly invest approximately US$ 500 million in the project. ITOCHU acquired its stake via its subsidiary Tyr Energy, which operates as the cornerstone of ITOCHU’s IPP investment business in North America and is a long-standing and long-term investor in the industry. Together with lead developer, Caithness Energy, and GE Energy Financial Services, as well as with Google and Sumitomo, ITOCHU will contribute to the project by supplying its know-how in power generation, with the aim of completing construction of the wind farm in 2012 and achieving stable operation thereafter.

Outline of the Project

The site of the Shepherds Flat wind project is a 30-square-mile (approx. 80-square-kilometer) area that stretches across Gilliam and Morrow Counties in north-central Oregon, near the town of Arlington. Once completed in 2012, the project will generate enough energy to supply more than 235,000 average US homes, and will achieve a reduction of about 1.5 million tons of carbon dioxide per year, equivalent to the annual amount of carbon dioxide from approximately 200,000 passenger vehicles. The power generated by the project will be sold to California utility Southern California Edison, a subsidiary of the major US power company Edison International, pursuant to three 20-year power purchase agreements, and will help the utility meet its renewable energy mandates. Construction of the massive project is being conducted in three parts or phases; it involves not only the installation of 338 state-of-the-art GE Energy 2.5xl turbines but also the development and construction of 95 miles (approx. 152 kilometers) of roads and 167 miles (approx. 267 kilometers) of power wire connections. Caithness Energy has estimated that the project will inject $16 million annually into Oregon as direct economic benefits. GE Energy’s 2.5xl wind turbines are larger than other GE Energy models and utilize permanent magnet generators — turbine technology that improves efficiency, reliability, and grid connection, helping to lower wind energy generation and transmission costs.

Significance for ITOCHU

As previously announced, in May 2010 during a meeting between GE Chairman and CEO Jeff Immelt and Masahiro Okafuji, President & CEO of ITOCHU in Tokyo, Japan, ITOCHU concluded with GE a memorandum on business collaboration concerning co-investment in renewable energy worldwide. In October 2010, ITOCHU invested in the 152-megawatt CPV Keenan II Wind Power Project in Oklahoma with GE Energy Financial Services; each of ITOCHU and GE Energy Financial Services made further investments in the CPV Keenan II project in December 2010. The Shepherds Flat Wind Project is the next renewable energy investment in a continuing series of collaboration worldwide between ITOCHU and GE under the May 2010 memorandum.

ITOCHU positions power generation as a key area of investment for the company and has been proactively expanding related businesses throughout the world. The company is involved in the development and operation of more than 15 power generation facilities through Tyr Energy in the North American region. ITOCHU is also active in development and investment in power assets in Asia, the Middle and Near East, and in other regions worldwide. In its home country of Japan, ITOCHU has been engaged in a wind power project in Horonobe, Hokkaido since 2000. In addition, NAES Corporation, an ITOCHU subsidiary and the largest provider of operation and maintenance services in North America, operates and maintains 117 power facilities worldwide, mainly across the United States, with total power output of 33,500 megawatts.

ITOCHU is set to aggressively pursue investment opportunities in power generation area, including power generating assets utilizing renewable energy.

FOR FURTHER INFORMATION, please see the joint press release of the owners of the Shepherds Flat Wind Project.

Related information

• Joint press release (75KB)