The anticipated ¥1 trillion ($6.3 billion) fee for SoftBank Group Corp. (OTC:SFTBY) from a U.S.-Japan project has been slashed by over 90% due to intervention from Tokyo officials amid growing concerns over the $550 billion joint investment plan between the U.S. and Japan.
SoftBank’s Role In The Deal
SoftBank was originally slated to earn fees from building and operating a $33 billion gas-fired power plant in Ohio. The project marks the first outcome of a trade deal in which Japan secured tariff relief from Washington in exchange for a $550 billion investment in the U.S., the Financial Times reported on Thursday.
The fee was intended to compensate it for its role as project developer, as it does not hold any equity in the power plant. The facility would be entirely financed by Japan and jointly owned by the U.S. and Japan through a special-purpose vehicle created under the trade agreement.
Despite the reduced fee, SoftBank will continue to receive payments over 15–20 years if it achieves the target capacity of 9.2 gigawatts. The company has already placed major orders to begin construction of the power plant, including a $10 billion deal for nearly 170 turbines from GE Vernova Inc. (NYSE:GEV).
SoftBank did not immediately respond to Benzinga‘s request for comments.
Takaichi Meets Trump On Trade, Energy
Japanese Prime Minister Sanae Takaichi is set to meet President Donald Trump on Thursday for talks on U.S-Japan ties, Middle East tensions, and energy security.
Takaichi is also expected to present a new set of at least three investments to Trump, including projects in copper smelting, display manufacturing, and nuclear energy with Westinghouse Electric Company, as per the Financial Times.
The deal gives Trump final approval authority and requires Japan to fund projects within 45 business days, with the timeline already underway for the nuclear plant.
In February, Trump announced that the U.S.-Japan trade deal was now fully in effect. He added that projects of this scale were only made possible through the use of tariffs. However, after the Supreme Court ruling on tariffs, the fate of the deal remains to be seen.
Earlier this week, Malaysia reportedly became the first country to declare its trade deal with the U.S. ‘null and void’ after the ruling.
Tokyo Seeks Fair Bids, Eyes SoftBank Risk
Tensions are rising in Tokyo as officials worry Japan is being sidelined in project selection and pressured to support inexperienced companies. The officials are pushing for a competitive bidding process due to SoftBank Group’s limited experience in nuclear energy.
SoftBank CEO Masayoshi Son‘s direct access to Trump is seen as both an advantage and a risk, though he remains one of the few capable of proposing large-scale deals tied to the $550 billion investment initiative.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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