Gore Street Capital has announced the successful completion of a fundraising round for Japan’s first fund dedicated to grid-scale energy storage systems. The “Tokyo Energy Storage Investment Limited Partnership” (the Fund) has been established in collaboration with ITOCHU Corporation, aiming to support the development and operation of battery storage facilities across the Kanto region.
The two firms were appointed managers of the Tokyo Metropolitan Government’s (TMG) energy storage and creation promotion fund in 2023, after a competitive selection process. Following their appointment, Gore Street and ITOCHU formed a joint venture company in February 2024 to act as the Fund’s general partner. Gore Street has also created a subsidiary, Gore Street Japan Limited, to support the investment activities of the Fund.
The Fund is a landmark initiative, marking the first time Japan has seen a dedicated, large-scale fund focused on energy storage projects. These projects will be critical in supporting renewable energy production, enabling the storage and efficient use of energy generated from sustainable sources. The Fund will primarily focus on the Kanto region, home to a significant portion of Japan’s population and energy consumption.
Alongside ITOCHU, the Tokyo Metropolitan Government became an early investor in the Fund, committing capital in March 2024. Other major investors include The Bank of Yokohama, Ltd., Honda Motor Co., Ltd., Mitsubishi UFJ Trust and Banking Corporation, and Japan Post Holdings Co., Ltd. The investment process was advised by Nomura Securities.
The business case for energy storage in Japan has gained significant momentum in recent years, with the introduction of a 20-year fixed-price contract secured through Japan’s long-term decarbonisation auction. This model offers investors a relatively low-risk opportunity while still unlocking the potential for significant returns in Japan’s emerging energy storage market. The recent introduction of new balancing services by Japan, which commenced in April 2024, is also seen as a key development in transitioning the market to a more dynamic model with potentially higher rewards.
Gore Street Capital brings its extensive experience in energy storage from markets in Germany, Great Britain, Ireland, and the US. The firm has been active in managing battery assets since 2017, largely through merchant-based models that balance wholesale trading with grid services. This expertise positions the Fund well to capitalise on the evolving market conditions in Japan, combining Gore Street’s track record with ITOCHU’s local market knowledge.
The Tokyo Energy Storage Investment Limited Partnership will play a crucial role in Japan’s decarbonisation strategy, supporting the Tokyo Metropolitan Government’s “HTT” (Reduce, Create, Store) initiative. The fund’s investments will help facilitate the realisation of a Zero Emission Tokyo, aiding the country’s broader transition to clean energy.
Suminori Arima, Chief Investment Officer at Gore Street Capital, expressed confidence in the venture: “We are pleased to announce the completion of this fundraising round for Japan’s first dedicated energy storage fund. Through our collaboration with ITOCHU, we are excited to build on our experience and help shape the future of the Japanese energy storage sector.”
With its combination of public and private investment, the Fund is expected to drive significant advancements in Japan’s renewable energy and energy storage infrastructure, aligning with global efforts to combat climate change.