Monthly Report

JR East to invest 2B yen in Erex, eyes collaboration on aggregation and decarbonization

December 25, 2024
JR East Renewable Energy
JR East owns a portfolio of wind and solar power plants. (Image: JR East Energy Development)

JR East, a railroad company with activities in renewable energy, has partnered with and will acquire a minority stake in Erex, a company active across the renewable energy value chain, the two companies announced on December 20, 2024.

“JR East and Erex concluded a capital and business alliance agreement, judging that by having the Erex Group provide supply and demand management function (aggregation) for renewable power plants owned by the JR East Group, it would be possible for the JR East Group to introduce renewable energy more efficiently,” the companies’ statement said.

The transaction is expected to be completed on January 14, 2025, when JR East will purchase 3,646,500 newly issued shares of Erex through third-party allotment for approximately 2 billion yen. Once complete, JR East will own 4.9% of Erex, solidifying its position as a long-term strategic partner.

While the partnership is primarily focused on aggregation, no specific agreement has been reached yet. According to the statement, Erex aggregating JR East’s assets is conditional on the former determining the projects to be profitable for its business and the latter reviewing the price and other terms to be proposed by Erex.

Beyond aggregation, the two companies plan to exchange personnel as necessary to implement the partnership and will consider jointly engaging in other decarbonization-related businesses, such as energy management.

JR East, through its subsidiary JR East Energy Development, has been involved in the development and operation of solar and wind power plants across Japan. Its operational portfolio includes over 150MW of solar and 30MW of wind, with over 500MW of wind in various stages of development. In addition to power retail and trading, Erex is also involved in biomass fuel import and the operation of biomass power plants.

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