Toyota commits $89m to new Sparx renewables fund

The Japanese asset management firm is initially investing $890,000 in the greenfield Mirai Renewable Energy Fund, targeting a final close by March 2019 on $267m.

Toyota, the second-largest auto maker in the world, will invest ¥10 billion ($89.1 million; €75.9 million) in a newly created fund focused on the renewable energy sector in Japan.

The new vehicle, Mirai Renewable Energy Fund, launched by Japanese asset manager Sparx Group, will aim to raise ¥30 billion and reach a final close at the end of March 2019.

The fund will be focused on greenfield investment in power-generation plants, including solar, biomass and wind power, and will have an overall fund period of 25 years.

“Ultimately, more than half of all power generated will likely be solar,” Shun Ozasa, a spokesman for Sparx Group, told Infrastructure Investor.

The fund is aiming to create energy plants with a total generation capacity of 250MW and to deliver an 8 percent IRR, Ozasa said.

Sparx Group will initially invest ¥100 million in the new fund.

“Toyota aims to have zero-emissions plants and new vehicles, and is looking toward future supplies of electricity for its manufacturing plants, electric vehicles, and dealerships. The fund should provide backing for the realisation of a low-carbon society that makes maximum use of clean energy,” Akiko Kita, a spokeswoman for Toyota, told Infrastructure Investor.

“With [Sparx’s] track record of developing numerous renewable energy power facilities and its project discovery, development support, and operational administration know-how, Toyota judged it would be an optimal fund in which it could invest,” Kita said.

Toyota had previously invested in two other Sparx funds, focusing on innovative companies active in robotics, artificial intelligence, and technologies related to the use and supply of hydrogen.

According to an official statement from Sparx Group, the new fund’s “basic principle” is to drive “renewable energy growth and use throughout Japan, with the aim of improv[ing] regional economic development and Japan’s energy self-reliance”.

Sparx expects to hold a first close by the end of December and is hoping to attract “investors who agree with the purpose of the fund”, Ozasa said.

Sparx announced the final close for its Sparx Renewable Energy Brownfield Fund on ¥47 billion in July, after receiving support from several LPs, including AEON Bank, Bank of Nagoya, NEC Capital Solutions, Nippon Life Insurance Company, Ricoh Leasing Company, Sumitomo Mitsui Banking Corporation, and Taiyo Life Insurance Company.

As of August 2018, Sparx’s assets under management totalled ¥1.1 trillion, with ¥158.6 billion allocated to their Japanese Renewable Energy Investment Strategy, which focuses on investment in power stations with recyclable energy, according to the company website.