Sustainable infrastructure investor Actis's renewable energy platform in Japan has closed financing on a 50MW/196MWh battery storage project. Nozomi Energy, the development platform Actis launched in 2023, reached financial close on its Nozu Battery Energy Storage System (BESS) project in Oita Prefecture, southern Japan, the company said on 14 September. Financial terms were not disclosed.
The developer secured non-recourse financing from Japanese commercial bank Aozora Bank. Actis said the financing required a demonstration of capabilities in feasibility analysis, design optimisation, project development, contracting, finance, and construction. Nozomi Energy was awarded a 20-year fixed revenue capacity market contract for Nozu BESS in Japan's inaugural Long-Term Decarbonisation Power Source Auction (LTDA), hosted in the 2023 financial year by OCCTO. It was one of two similar-sized projects for which the developer won contracts, each for 37MW of capacity. Actis founded Nozomi Energy three years ago as a US$500 million renewable energy platform focused on Japan, and the developer aims to have a 1.1GW portfolio of onshore wind, solar PV generation and battery storage by 2027.
The LTDA was the first mechanism to offer long-term contracted revenue to battery storage operators in Japan. While payments are fairly low, equivalent to about a 3% IRR according to one source, their contracted nature gives financiers some comfort in the bankability of projects. Nozomi Energy president and CEO Jose Antonio Millan Ruano said the financial close demonstrated an ability "to originate, develop and finance complex renewable energy infrastructure in Japan" and marks the next stage of the developer's growth "into flexible infrastructure."
What remains unknown is the exact financing amount and the project's expected commercial operation date. The LTDA contract terms require operators to return 90% of any additional merchant profits to OCCTO, which may limit commercial interest for some developers. The scheme also changed scope for the most recent FY2025 auction, with only projects of 6-hour duration or longer awarded fixed-revenue contracts for capacity delivery beginning in FY2027.