Revenue Risk from Overseas FIT Schemes and Approved Capacity Allocations

「In addition, for solar power projects in the country, the company is promoting development using the government’s Green Energy Auction Program (GEAP). If a successful bid under the program is delayed beyond the scheduled commercial operation start date, liquidated damages accrue daily. If the delay exceeds a specified period, the performance bond provided is forfeited in full and the bidder’s eligibility is revoked.」

「The company also invests in and participates in hydropower projects in the Republic of the Philippines (the “Philippines”). Under the FIT scheme for hydropower projects in the Philippines, an FIT price is approved and applied to projects that begin operations, and an upper limit is set on the aggregate capacity of hydropower projects eligible for FIT approval. The project in which the company invests and participates is currently under construction and is expected to fall within the applicable limit when operations begin. However, if the FIT allocation has reached its limit because of a delay in the start of operations or because other operators obtain FIT approval in excess of expectations by that time, the project in which the company invests and participates may be unable to obtain FIT approval. Even without FIT approval, electricity can be sold bilaterally to an offtaker or in the market, but if the company is forced to sell electricity below the FIT price, the Group’s operating results and financial position may be affected.」