Sparx closes greenfield renewables fund on ¥31.6bn – exclusive

Backed by Chubu Electric, Toyota, Mizuho Bank and Sumitomo Mitsui Banking Corporation, the new fund exceeded its original ¥30bn target and has already invested in a solar project in Japan.

Tokyo-based Sparx Group’s latest renewables fund reached a final close of ¥31.6 billion ($282 million; €252 million) at the end of March, the firm’s head of green energy investment has told Infrastructure Investor.

Launched in September 2018, the Mirai Renewable Energy Fund focuses on greenfield projects in Japan. It secured its first ¥10 billion from Toyota at the time of its launch. A Toyota spokeswoman told Infrastructure Investor at the time that the automaker aimed to have zero-emissions plants and vehicles and was looking towards future electricity supplies.

In November, Sparx, which is contributing ¥100 million of its own capital, said it had raised an additional ¥13.6 billion from Mizuho Bank, Sumitomo Mitsui Banking Corporation and Chubu Electric. It said that Chubu was working to reduce CO2 emissions by aggressively developing renewable energy sources: “Chubu Electric believes this investment could make more contributions to the increase of renewable energy sources and the reduction of CO2 emissions in Japan.”

Hiroshi Ouchi, Sparx’s head of green energy investment, declined to name other investors that had contributed to the fund since then, nor the specific amounts raised from each LP. He said the fund had already invested in one solar project in Japan as the sector remains “the most favourable” in the renewables space, but declined to provide further details.

The firm said in its November statement that the vehicle would have a 25-year lifespan and would invest in solar, wind, biomass, geothermal and hydraulic power projects.

The fund is aiming to develop energy assets with a total generation capacity of 250MW, more than half of which will come from solar power. Shun Ozasa, a spokesman for the firm, told Infrastructure Investor last September that the vehicle would be targeting an IRR of 8 percent.

In July 2018, the Japanese asset manager held a final close for its Sparx Renewable Energy Brownfield Fund on ¥47 billion. The strategy raised capital from several domestic LPs, including AEON Bank, Bank of Nagoya, NEC Capital SolutionsNippon Life Insurance CompanyRicoh Leasing Company, Sumitomo Mitsui Banking Corporation and Taiyo Life Insurance Company.

As of last month, Sparx’s total AUM stood at ¥1.2 trillion. In addition to renewables, the asset manager also invests in Japanese real estate and in unlisted companies focusing on innovative technologies, such as artificial intelligence, robotics and technologies related to the use of hydrogen as fuel.