CDPQ Partners With Shizen Energy to Accelerate Energy Transition in Japan and Elsewhere
Shizen Energy Inc., a renewable energy leader in Japan, and Caisse de dépôt et placement du Québec (CDPQ), has announced ¥20 billion or US $135 million investment in Shizen Energy.
Shizen Energy and CDPQ have also agreed to a co-investment framework, which will involve potential investments of ¥50 billion o US $339 million by CDPQ.
Following this transaction, CDPQ has obtained a seat on the board of directors of Shizen Energy.
Fukuoka based Shizen Energy is a renewable energy leader in Japan. Its business includes development, financing, and asset management of renewable energy power plants using solar power, wind power, small-scale hydroelectric power, and biomass.
The CDPQ investment will allow Shizen Energy to accelerate its ongoing renewable power plant development activities, business enhancement initiatives in energy digitalization, and human capital expansion in key markets.
Jonathan Tourino Jacobo of PVTech also reports Shizen Energy secures US$480 million investment to accelerate renewables portfolio in Japan and key markets:
Japanese renewable energy company Shizen Energy has received a ¥20 billion (US$133 million) investment from investment group CDPQ.
Both companies have also agreed to a co-investment framework with potential investment of ¥50 billion by CDPQ.
With CPDQ’s investment the Japanese renewables company will accelerate its renewables development portfolio in Japan and in key international markets, while also expanding its staff.
In Japan, it will continue developing ground mount and rooftop solar PV, agrivoltaics and other renewable technologies.
Outside of Japan, Shizen Energy has completed several solar PV projects in Brazil, Indonesia, Thailand and Vietnam. The company will continue to secure on-site and off-site power purchase agreements (PPAs) in Southeast Asia and Brazil, while it aims to work on large-scale solar PV projects with local companies.
Emmanuel Jaclot, executive vice-president and head of infrastructure at CDPQ, said: “This transaction in Japan is an important milestone in the deployment of CDPQ’s long-term Asia-Pacific infrastructure strategy.”
Following the transaction, CDPQ has obtained a seat on the board of directors of Shizen Energy. With this latest investment Shizen Energy has so far managed to fundraise up to ¥74.4 billion this year.
Moreover, the company has been involved with 1GW of renewables capacity installed – mostly from solar PV with more than 700MW – in Japan and overseas and aims to reach a power output of 10GW by the end of the decade.Pr
Nikkei Asia also reports Canada pension fund to pour US $470 million into Japanese renewables company:
Major Canadian pension fund CDPQ plans to invest 70 billion yen ($474 million) in Shizen Energy, a Japanese developer of renewable energy.
Demand is increasing for environmentally conscious investing globally. If Japanese renewable energy companies can build a track record at home and abroad, they will be able to attract global decarbonization money.
CDPQ will invest 20 billion yen by subscribing to Shizen Energy convertible bonds in October. In addition, 50 billion yen has been set aside for an investment framework in which Shizen will develop renewable energy power generation in Japan and overseas. The Canadian fund will dispatch a director to the Japanese company's board to determine which development projects to invest in.
"What we saw in Shizen is energy transition in Japan but also roots in Southeast Asia and all the way to Brazil," said Emmanuel Jaclot, executive vice president and head of infrastructure at CDPQ, in a recent interview with Nikkei.
CDPQ manages the pensions of over 6 million people, and its net assets reached around 420 billion Canadian dollars ($308 billion at current rates) as of the end of 2021. The fund has shifted focus to decarbonization from companies involved in crude oil production and will invest 54 billion Canadian dollars in renewables-related projects by 2025.
This will mark the fund's first time investing directly in a Japanese infrastructure company. It has invested in companies in the U.S., Europe and India. It has been seeking fresh opportunities to invest in Asia.
Shizen Energy was established in 2011. Its investors have included Tokyo Gas and JIC Venture Growth Investments, an arm of state-backed investment fund Japan Investment Corp.
Shizen has developed a total of 1 gigawatt of renewable energy projects in Japan and abroad, including solar and wind power. Plans are to increase this to 10 gigawatts by 2030, including through offshore wind power development.
CDPQ put out a press release earlier today announcing this investment in Shizen Energy:
Shizen Energy Inc. (Shizen Energy), a renewable energy leader in Japan, and CDPQ, a global investment group, are pleased to announce a JPY 20-billion (USD 135-million) investment in Shizen Energy. Shizen Energy and CDPQ have also agreed to a co-investment framework, which will involve potential investments of JPY 50 billion (USD 339 million) by CDPQ.
This investment by CDPQ will allow Shizen Energy to accelerate its ongoing renewable power plant development activities, business enhancement initiatives in energy digitalization, and human capital expansion in key markets. Following this transaction, CDPQ has obtained a seat on the Board of Directors of Shizen Energy.
In Japan, Shizen Energy will continue to develop a variety of renewable energy sources, including ground and roof-mounted solar power, agri-solar power, onshore and offshore wind power, small-scale hydroelectric power, and biomass power. In addition, Shizen Energy will conduct further research and development of its proprietary energy management systems to effectively utilize renewable energy. For its overseas projects, Shizen Energy will continue to accelerate on-site and off-site PPA in southeast Asia and Brazil and will aim to work on large-scale solar and wind power generation projects in partnership with leading local companies.
Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ, said: “This transaction in Japan is an important milestone in the deployment of CDPQ’s long-term Asia-Pacific infrastructure strategy. Japan has a crucial role to play in the decarbonation of Asia, and as an investor with deep experience in renewable energy, we are delighted to be working with the Shizen team to deliver on their ambitious plan for the energy transition.”
Shizen Energy’s Co-founders and Directors Ken Isono, Masaya Hasegawa, and Kenji Kawado stated: “We are very honoured to form this partnership with CDPQ, which has been moving toward sustainable management for decades and is currently investing in the realization of a decarbonized society from a long-term perspective. Shizen Energy has been striving to achieve its purpose of ’We take action for the blue planet’, and we feel that even greater speed is required to resolve global warming and energy challenges. Through our collaboration with CDPQ, we will accelerate our global actions for the future of this Earth.”
With “We take action for the blue planet” as its purpose, Shizen Energy will continue to tirelessly promote renewable energy to serve the needs of local communities and strive to build a sustainable society by using its expertise in renewable power development, operations & maintenance and digital solutions in Japan and overseas.
About Shizen Energy Inc.
Founded in June 2011. With the company purpose of “We take action for the blue planet”, the company’s business includes development, financing, and asset management of renewable energy power plants using solar power, wind power, small-scale hydroelectric power, and biomass. Since 2016, the company has also been focusing on its overseas operations, expanding its development and power generation projects in areas such as Southeast Asia and Brazil. In 2019, the company also entered the energy tech business, offering micro-grid and VPP construction, smart charging and discharging services for EVs, and other services through its self-developed EMS (energy management system). Shizen Energy Group has been involved in more than 1 GW of renewable energy generation in Japan and overseas.
Website: www.shizenenergy.net/en/
About CDPQ
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at As at June 30, 2022, CDPQ’s net assets totalled CAD 391.6 billion. For more information, visit cdpq.com, follow us on Twitter or consult our Facebook or LinkedIn pages.
CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.
Shizen Energy also put out a press release on this investment featuring a nice picture of its directors with Emmanuel Jaclot, EVP and Head of Infrastructure at CDPQ:
- This first direct infrastructure investment in Japan by global investment group CDPQ will allow Shizen Energy to grow in Japan and in its key international markets.
- With this announcement, Shizen Energy’s fundraising initiatives total JPY 74.4 billion this year, following investments by JIC and SIGMAXYZ Investment.
Shizen Energy Inc. (Shizen Energy), a renewable energy leader in Japan, and CDPQ, a global investment group, are pleased to announce a JPY 20-billion investment in Shizen Energy by CDPQ. Shizen Energy and CDPQ have also agreed to a co-investment framework, which will involve investments by CDPQ of JPY 50 billion. In addition, CDPQ has obtained a seat on Shizen Energy’s Board of Directors.
With fundraising initiatives in February this year with investors JIC Venture Growth Investments Co., Ltd. (JIC VGI) and SIGMAXYZ Investment Inc. (SIGMAXYZ Investment) which totalled JPY 4.4 billion, Shizen Energy has now reached fundraising agreements that total JPY 74.4 billion this year.
Shizen Energy has already begun collaborating with SIGMAXYZ Investment on business development in the new area of energy tech, and Shizen Energy will join forces further with all the partners to co-create growth opportunities in the future.
These investments by CDPQ, JIC VGI and SIGMAXYZ Investment will allow Shizen Energy to accelerate its ongoing renewable power plant development activities, business enhancement initiatives in energy digitalization, and human capital expansion in key markets.
In Japan, Shizen Energy will continue to develop a variety of renewable energy sources, including ground and roof-mounted solar power, agri-solar power, onshore and offshore wind power, small-scale hydroelectric power, and biomass power. In addition, Shizen Energy will conduct further research and development of its proprietary energy management systems to effectively utilize renewable energy. For its overseas projects, Shizen Energy will continue to accelerate on-site and off-site PPA in southeast Asia and Brazil, and will aim to work on large-scale solar and wind power generation projects in partnership with leading local companies.
Shizen Energy will deliver carbon-neutral technologies and solutions for corporations and municipalities, empowering local communities to accelerate the energy transition in Japan and overseas, primarily in APAC and Brazil.
Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure, CDPQ, says: “This transaction in Japan is an important milestone in the deployment of CDPQ’s long-term Asia-Pacific infrastructure strategy. Japan has a crucial role to play in the decarbonation of Asia, and as an investor with deep experience in renewable energy, we are delighted to be working with the Shizen team to deliver on their ambitious plan for the energy transition.”
Akira Suenaga, Partner of JIC VGI says: “Shizen Energy is an innovative company that is working to develop diverse renewable energy sources in many countries, including Japan, Southeast Asia, and Brazil, while leveraging the agility as a startup. We are proud to be able to contribute to the realization of a carbon-neutral society, which is an urgent issue not only for Japan but for the entire world, by accompanying the Shizen Energy team.”
Shunichi Shibanuma, President and Representative Director of SIGMAXYZ Investment, says: “The development of renewable energy power sources and decentralized energy systems are urgent issues that we must address on a global scale, and the energy transition that Shizen Energy aims to achieve is an important initiative toward the realization of a sustainable society. We believe that the more Shizen Energy’s business expands, the more livable the earth will become. We sincerely look forward to working with Shizen Energy to build such a regenerative business model through our investment and business support.”
Shizen Energy’s Co-founders and Directors Ken Isono, Masaya Hasegawa, and Kenji Kawado stated, “We are very honoured to form this partnership with CDPQ, which has been moving toward sustainable management for decades and is currently investing in the realization of a decarbonized society from an long-term perspective. Shizen Energy has been striving to achieve its purpose of ’We take action for the blue planet’, and we feel that even greater speed is required to resolve global warming and energy challenges. Through our collaboration with CDPQ, JIC VGI, and SIGMAXYZ Investment, which we have partnered this year, we will accelerate our global actions for the future of this Earth.”
*From the left,
– Shunichi Shibanuma, President and Representative Director of SIGMAXYZ Investment
– Akira Suenaga, Partner of JIC VGI
– Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure, CDPQ
– Shizen Energy’s Co-founders and Directors Ken Isono, Kenji Kawado and Masaya HasegawaAbout Shizen Energy Inc.
Founded in June 2011. With the company purpose of “We take action for the blue planet,” the company’s business includes development, financing, and asset management of renewable energy power plants using solar power, wind power, small-scale hydroelectric power, and biomass. Since 2016, the company has also been focusing on its overseas operations, expanding its development and power generation projects in areas such as Southeast Asia and Brazil. In 2019, the company also entered the energy tech business, offering micro-grid and VPP construction, smart charging and discharging services for EVs, and other services through its self-developed EMS (energy management system). Shizen Energy Group has been involved in more than 1 GW of renewable energy generation in Japan and overseas.
URL: http://www.shizenenergy.net/en/About CDPQ
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2022, CDPQ’s net assets totalled CAD 391.6 billion. For more information, visit cdpq.com, follow us on Twitter or consult our Facebook or LinkedIn pages.
CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.About JIC Venture Growth Investments Co., Ltd.
JIC Venture Growth Investments Co., Ltd. (JIC VGI) was established in July 2020 as a venture capital arm of Japan Investment Corporation (JIC) group. Its mission is to promote innovation and improve the international competitiveness of Japanese firms through growth-investments to startup companies, all toward the broader goal of helping to solve Japan’s social and industrial issues.
URL: https://www.j-vgi.co.jp/en/About SIGMAXYZ Investment Inc.
Established in April 2021, SIGMAXYZ Investment Inc. is responsible for the investment business of the SIGMAXYZ Group. The company is a wholly owned subsidiary of SIGMAXYZ Holdings Inc. (Headquarters: Minato-ku, Tokyo; President and Representative Director: Ryuichi Tomimura; Stock Code: 6088 Tokyo Stock Exchange Prime Market). The investment activities focus on the “regenerative & well-being” area that enriches people’s lives, while making wise use of global resources. It supports the growth and enhancement of our investee companies’ corporate value, such as strategic business investments, including venture and growth investments, and the establishment of joint ventures through the linkage with the consulting business.
For more information, please visit https://www.sigmaxyz.com/sxi/
This investment in Shizen Energy is exciting news, marking CDPQ's first time investing directly in a Japanese infrastructure company.
I would invite my readers to read more about Shiizen Energy here and note its mission statement and its origins:
We for the .
The three founders were raised in the nature-rich countryside of Japan. Shizen Energy was started from the simple mindset “be the change”, three months after experiencing the tragic nuclear accident in 2011.
We believe the biggest impact to sustain our beautiful blue planet is accelerating the energy transition to a 100% renewable-powered planet.
While the human environmental footprint rises and climate change advances, the key to accelerate the energy transition is to connect the “grid of common purposes” of our friends and partners across the globe and work hand-in-hand. We can co-create a 100% renewable-powered planet so more people can live happily ever after on this planet.
We will take action to sustain the blue planet by creating the business models of the future.
I'd also invite you to read the origins of this company here and how it was founded in 2011 by three men in the their thirties who first met in 2005 working at a wind power company and were struck by the tragic events of March 2011.
It's quite impressive that these young men formed this renewable energy company and have taken it so far, garnering the attention of serious institutional investors at home and now from abroad.
CDPQ's Infrastructure team doesn't invest US$474 million in a company like this without performing serious due diligence and when you look at its operations in Japan, Malaysia and Brazil, it's very impressive what they have managed to accomplish in a relatively short time.
I am just giving you a glimpse, see Shizen's press releases here to fully appreciate why this is a great partner for CDPQ.
Also, note this about Shizen:
In 2019, the company also entered the energy tech business, offering micro-grid and VPP construction, smart charging and discharging services for EVs, and other services through its self-developed EMS (energy management system). Shizen Energy Group has been involved in more than 1 GW of renewable energy generation in Japan and overseas.
The alignment of interests are all there with a hard focus on sustainable investing in infrastructure in Japan, APAC and Brazil.
And the fact that CDPQ made its first direct infrastructure investment in Japan with this relatively young company speaks volumes to me.
It tells me they want this to be a long-term partnership which flourishes over the long run.
For Shizen Energy, they have a long-term investor which shares their passion for a blue planet.
Also, CDPQ's Infrastructure team is one of the best in the world and they are well connected with other great investors and partners all over the planet.
Its leader, Emmanuel Jaclot, is on record stating decarbonization of their portfolio is a central theme, part of CDPQ’s initial target to reduce emissions across its entire portfolio by 60% by 2030.
Moreover, CDPQ plans to invest up to US$ 2 billion in Latin America next year, much of it in infrastructure and renewable energy projects:
Canadian pension fund CDPQ is upping its investments in Latin America with plans to allocate up to US$2bn in the region in 2023 as it looks to diversify its infrastructure portfolio.
The bulk of the resources will be for Brazil. As for new segments, the company is looking for opportunities in telecom towers and datacenters, energy (notably renewables), transportation (airports and railways) and, increasingly, sanitation, among others.
“We are constantly growing our investments in Latin America and Brazil. Three years ago, we had nothing allocated in Brazil. Today we have more than US$5bn in the country, just in infrastructure. The trend is to continue increasing this [portfolio] in the country and in the region, at least until the end of the decade,” Eduardo Farhat, managing director of CDPQ for Brazil and Latin America infra VP, told BNamericas.
According to the executive, CDPQ expects to push for US$1bn-2bn in annual investments in the next years in the region, driven by opportunities in a vast array of infrastructure segments, and depending on “the quality of the operations and the regulatory frameworks.”
In 2021, CDPQ invested US$11bn globally, Farhat said.
You can read the rest of this article here but if you connect the dots, you see why this investment in Shizen Energy is strategic in many ways.
I'm convinced this will be mutually beneficial partnership over the long run.
It also helps that the yen is very weak relative to the US dollar so this investment is coming at the right time from a foreign exchange perspective, but F/X gains are peanuts when you think about the long-term potential gains from the company's growth prospects:
Shizen Energy is an impressive company which is why CDPQ, JIC VGI and SIGMAXYZ Investment have all invested in it.
Also worth noting this is the second major investment in Japan for CDPQ, having recently partnered with Vena Energy to develop its first green project bond there.
Lastly, CDPQ just announced the appointment of Martin Longchamps as Executive Vice-President and Head of Private Equity:
Mr. Longchamps will work in CDPQ’s Montréal office and will be responsible for the International Private Equity portfolio, which includes investments in various sectors around the world. Before joining CDPQ, Mr. Longchamps was Managing Director, Head of Origination and Execution, Private Equity, at the Public Sector Pension Investment Board (PSP Investments).
He earned an MBA from Harvard Business School and a Bachelor’s in Commerce from McGill University and has previously worked as Vice-President, Corporate Development at Transcontinental, as a Partner at Edgestone Capital Partners and as an Investment Analyst at CDP Capital Communications, previously a CDPQ subsidiary, in the early 2000s. Mr. Longchamps starts in his new position on November 14, 2022.“I’m delighted that Martin Longchamps is joining our team. His experience in the institutional and private sectors, in all stages of the investment cycle and aspects of asset management, will be an asset,” said Charles Emond, President and Chief Executive Officer of CDPQ.
CDPQ would also like to thank Martin Laguerre for his work over the last three years in the organization’s Private Equity portfolio.
This caught me a bit off guard but it's clear Martin Longchamps is extremely well qualified to assume this important role. I also wish Martin Laguerre the best and think he and his team did a great job producing solid long-term results:
Over five years, the portfolio produced an annualized return of 17.6%, outperforming its benchmark portfolio, which stood at 12.4%. This positive difference is the result of good sectoral allocation, including investments in health care, insurance and technology, combined with the quality of asset management, which is a core element of the investment approach. In an uncertain environment, the team also successfully continued providing customized support to portfolio companies on their strategies, acquisitions and operations.
Update: See Martin Laguerre's departing note on Linkedin here.
Below, Principle Power's Chief Commercial Officer, Aaron Smith discusses Japan's market potential and innovation opportunities for the offshore wind power industry and renewable energy businesses.
Japan is committed to achieving net zero by 2050 and has set out an ambitious plan to lead the world in decarbonization. Companies from around the world can enjoy trusted partnerships in Japan, and create innovative, new solutions to deal with the global issue of climate change.
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