SPARX targets $458m final close on new renewables fund by July – exclusive

The new vehicle’s portfolio includes 12 solar projects acquired from the $80m greenfield renewables fund the Japanese asset manager liquidated earlier this year.

SPARX Asset Management is targeting a final close in July for its 50 billion-yen ($458 million; €392 million) brownfield renewables fund, after reaching a first close on 20 billion yen last November, Infrastructure Investor has learnt.

The Renewable Energy Brownfield Fund will remain open to commitments until 10 July, Takahide Taniwaki, president of Sparx’s energy department told Infrastructure Investor. The vehicle has, to date, raised capital from domestic LPs, including Ricoh Leasing Company, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Finance and Leasing, Taiyo Life Insurance Company, Tochigi Bank and others.

The latest fund has invested in 15 assets – of which 12 are operating solar projects, with a total capacity of 99MW, that were bought from the renewable fund Sparx Asset Management liquidated earlier this year.

Launched in October 2012, the SPARX Public-Private Green Energy Fund had raised 8.8 billion yen, from various institutional investors, including a 1.5 billion yen cornerstone commitment from the Tokyo Metropolitan government. SPARX Group, the fund’s general partner, had also injected 200 million yen into the vehicle.

The fund aimed to develop greenfield renewable energy power projects across Japan, which resulted in the development of 12 power projects in 11 prefectures. By the time the fund was liquidated in January, it had increased its principal by about 1.6 times and achieved a gross IRR of approximately 10 percent, Sparx Group said in a statement earlier this week.

The firm believes the fund model has proved successful and “provides a framework for leveraging public spending through investment funds”, the firm said.

The SPARX Public-Private Green Energy Fund, was the firm’s first vehicle dedicated to the renewable energy sector. As at the end of March, the Japanese GP had invested 159.4 billion yen in 25 renewable power generation projects with a combined capacity of 385MW. The firm declined to disclose further details about its renewables investment vehicles, but other publicly announced funds include the Mirai Green Energy Investment Limited Partnership and the Public-Private Renewable Energy Fund, the second vehicle formed under the partnership with the Tokyo Metropolitan Government in 2015.

In addition to renewables, SPARX Group also invests in equities in Japan and Korea and Japanese real estate. The group’s assets under management stood at 1.2 trillion yen as of this April.

Since the 2011 Fukushima nuclear disaster, Japan has been aiming to boost renewable energy power generation and reduce its reliance on nuclear. Given favourable policies and ease of installation, the solar sector has grown from 6.6GW in 2012 to 48.6GW in 2017, according to statistics from the International Renewable Energy Agency.