Notice Regarding the Establishment of the SPARX Energy Storage Fund

SPARX Group Co., Ltd. (hereinafter "SPARX") has established the "SPARX Energy Storage Fund" (hereinafter "the Fund") as a new initiative toward achieving carbon neutrality in Japan. The Fund primarily targets investments in merchant-type (market-operated) energy storage projects that aim to generate revenue through market operations.

Energy storage stations are large-scale facilities that connect directly to the power grid. They function by charging during periods of surplus and discharging during periods of shortage, while also serving as a balancing resource to suppress output fluctuations in power sources. They are attracting attention as critical next-generation infrastructure that can resolve issues such as "grid instability" and "output curtailment" associated with the expansion of renewable energy, thereby balancing decarbonization with a stable power supply.

In recent years, the adoption of energy storage stations has been expanding rapidly worldwide, and demand is also increasing domestically. In February 2024, our company established the "SPARX Green Energy Storage Fund," which targets energy storage stations utilizing the Long-term Decarbonized Power Source Auction. We have now launched this new fund in response to recent volatility in the electricity market and the growing importance of flexible balancing capacity.

The energy storage projects targeted by this Fund do not rely on specific long-term contracts. Instead, they aim to maximize revenue by flexibly charging and discharging electricity according to supply and demand conditions, and by trading in the supply-demand adjustment market, the wholesale electricity market, and the capacity market.

SPARX serves as the General Partner (GP) of the Fund, and its subsidiary, SPARX Asset Management Co., Ltd., acts as the investment manager. With capital contributions from institutional investors and corporate partners (LPs), we concluded the partnership agreement today for a total of 6.1 billion yen. We plan to continue fundraising until July 31, 2026, with a target fund size of approximately 10 billion yen.

Furthermore, our subsidiary, SPARX Green Energy & Technology Co., Ltd. (hereinafter "SGET"), has a track record of developing and operating renewable energy projects at 349 locations across Japan, totaling 727 MW, and has been promoting the adoption of solar and wind power. Additionally, the company is engaged in new areas, including the development of energy storage projects at 5 locations nationwide totaling 230 MW, and a green hydrogen production plant capable of producing 100 tons of hydrogen annually.

Our group will continue to contribute to the realization of a decarbonized society and the development of a sustainable society through ongoing investments in renewable energy projects, energy storage projects, and green hydrogen production projects.

Fund Name

SPARX Energy Storage Investment Limited Partnership

"SPARX Energy Storage Fund"

Investment Target

Equity interests in domestic energy storage battery businesses, and other investment securities, etc.

Investors

General Partner: SPARX Group Co., Ltd.

Limited Partners: Resona Bank, Limited; Hulic Co., Ltd.; The Joyo Bank, Ltd., and others

Investment Manager

SPARX Asset Management Co., Ltd.

Fund Size

Approximately 10 billion yen

Fund Term

10 years

Fundraising Period

Until July 31, 2026