GIC debuts in Japanese renewables sector

The Singaporean SWF teams up with Goldman Sachs for a stake in Tokyo-based energy generation developer JRE.

GIC, Singapore’s sovereign wealth fund, made its first investment in Japan’s infrastructure and renewables sector after acquiring a stake in Japan Renewable Energy Corporation.

The Tokyo-based renewables developer builds and operates various types of renewables generation projects across Japan, including solar, wind and biomass. It currently runs 34 power plants with a total capacity of approximately 210MW, while another 170MW of new plants are under construction.

GIC declined to disclose further transaction details, but an affiliate of the firm has become a corporate partner in GS Renewable Holdings, JRE’s parent company.

Ang Eng Seng, chief investment officer of infrastructure at GIC, said it sees JRE as a platform with an experienced management team and “looks forward to supporting its growth alongside its partner Goldman Sachs to generate stable and sustainable returns”.

GIC currently manages $100 billion in assets and primarily invests in operating infrastructure assets directly for a high degree of cashflow visibility and a hedge against inflation. It has made direct investments in more than 6GW of renewable energy assets globally, including the Philippines’ Energy Development Corporation and India’s Greenko.

Japan’s renewables sector has attracted international investors over the past few years. Recent transactions in the sector include the acquisition of renewables developer RES Japan by Macquarie Capital in June and the sale of SunEdison’s commercial and industrial division to trading company Mitsui & Co. Meanwhile, the US’s GE Energy Financial Services is raising a 75 billion-yen ($663 million; €561 million) Japan solar fund from the Japanese institutional market.