Alternative investment manager focused on the Asia-Pacific region, PAG has closed its maiden renewable energy dedicated fund PAG REN I, having raised $550 million in capital commitments. Solar energy generation projects in Japan, supplying solar power to corporations, is a 'primary target' of the fund.
Apart from Japan, PAG says the new fund will invest in physical renewable energy assets in Asia to support their development, acquisition and operations. The goal is to advance clean energy transition in the region while generating risk-adjusted returns, said PAG.
The investment firm counts to have invested $1.6 billion in renewable energy in its 26 years, and operates through PAG Renewables, calling it one of the largest renewable energy platforms in Japan. The latter will manage the PAG REN I portfolio.
"We are grateful for the support that REN I has received from a diverse group of institutional investors," said President and CEO of PAG Renewables James Buford. "The strong response to this fund demonstrates investor confidence in the need and opportunity to enable the transition from fossil fuels to clean, domestically produced sources of energy generation in Asia."
Participants in this round included pensions, sovereign wealth funds and fund of funds investors in North America, Europe and the Middle East. While PAG did not disclose any of the investors to its fund, Abu Dhabi sovereign investor Mubadala Investment Company announced investing in PAG REN I. It marks Mubadala's 1st clean energy investment in Japan.
PAG believes that Asia-Pacific's renewable power generation and energy storage needs over the next decade require more than $2 trillion in investment. In Japan alone, annual renewable energy investment will need to grow by over 5 times from 2023 to roughly double renewable energy generation from 2020 levels to achieve net-zero by 2050.
Japan also has a high population of corporates that have committed to becoming 100% renewable energy powered.
"Demand from corporate customers in Japan who value protection from energy price volatility and clean energy attributes far outstrips current supply, and will drive the next phase of growth," added Managing Director and Chief Investment Officer of PAG in Japan, Dimitrios Vavougyios.
Japan targets to achieve 108 GW cumulative solar power capacity by 2030. It will be an increase from 87 GW the country achieved till 2023-end, according to the International Renewable Energy Agency (IRENA).