Bain to acquire Japan Wind Development for $80 million

Founded in 1999, JWD currently operates 18 wind farms across Japan and a further three in Germany. Bain - which expects to close the deal in early May - plans to grow the business further by focusing on operational improvements in existing wind farms and developing new facilities. 

Demand for alternate energy sources has been in high demand in Japan since the 2011 Great East Japan Earthquake, which triggered the Fukushima Daiichi nuclear disaster, and the subsequent shutdown of the nation's nuclear reactors.

In order to meet the country's increasing energy demands - currently met with expensive liquified natural gas (LNG) imports - the Japanese government is subsidising the development of green energy. Wind power currently accounts for 0.5% of the country's energy mix, but the government wants this to reach 5.1% by 2030 - up from the 1.7% target set prior to the earthquake.

Subsidies have been provided through the FIT (feed-in tariff) system since 2012 and there is also a guarantee of fixed purchase price for electricity from renewable sources for the next 20 years.

According to a statement, JWD's large pipeline is down to the fact that it was one of few companies to actively develop new sites during the three-year period leading up to 2012 when the government had ceased previous wind energy subsidies.

"JWD currently holds the largest development pipeline for new wind farms in Japan, including a number of well-positioned sites in areas such as Hokkaido and Tohoku," said Yuji Sugimoto, a managing director at Bain. "The company's strong growth potential will further contribute to a more favorable energy mix in Japan."

Other private equity investments in Japan's renewable space include a $250 million investment in Nippon Renewable Energy (NRE), which operates Japan Solar, led by Equis Funds Group and Partners Group in early 2014. When Equis closed its second fund at $1 billion earlier this year, it also raised a $400 million co-investment pool to support Japan Solar and Energon, an India and Southeast Asia wind platform.

There has also been a JPY7.5 billion investment in an unnamed Japanese solar power-focused fund by Hong Kong-listed solar cell manufacturer Shunfeng Photovoltaic International.

Bain - which is targeting $2.5 billion for its soon-to-be-launched third Asian fund - is a prolific investor in Japan. Earlier this month it acquired Oedo-onsen, one of Japan's largest traditional inn and hot spring chain operators, for JPY50 billion; while in February it launched a $79 million bid for Tokyo-listed Japanese mushroom producer Yukiguni Maitake.

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