JAPAN Law and Practice Contributed by: Yusuke Murakami, Nobuhiko Suzuki, Yuma Ito and Masataka Hayano, Mori Hamada & Matsumoto
Mori Hamada & Matsumoto Marunouchi Park Building 2-6-1 Marunouchi Chiyoda-ku Tokyo 100-8222 Japan
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1. Market Trends 1.1 Energy and Infrastructure M&A Market Japan’s broader M&A market has been exceptionally strong in 2025, hitting a record in H1 and driving Asia’s rebound. That momentum has spilled into energy and infrastructure adjacencies, while pure renewables dealflow remains selective. Despite recent inflation- ary trends, changes in the financing market and the current wars in Ukraine and Gaza, Japan has seen continued steady growth in its energy and infrastruc- ture M&A market. Against a backdrop of an accelerating global trend toward decarbonisation, many developers and util- ity companies have been keen to develop or acquire renewable energy projects in Japan. In 2021, Japan’s biggest oil refiner, ENEOS Corporation, completed its historic acquisition of a major renewable developer, Japan Renewable Energy, from Goldman Sachs and GIC. The deal, valued at approximately JPY200 bil- lion, marked a historic milestone and, since then, has been regarded as a benchmark for valuations in the Japanese energy market, with subsequent transac- tions maintaining relatively high valuations. That said, it is also true that the recent inflationary trends, disruption in global supply chains and the extraordinarily weak yen have had some adverse effects on the development and operation of energy and infrastructure projects. Offshore wind auctions and corporate power purchase agreements (CPPAs) (whether under the Feed-in-Tariff (FIT)/Feed-In-Premi-
um (FIP) subsidies or not)have continued to under- pin project pipelines, but the recent cost-of-capital sensitivity and disruptions in the supply chain have made deal-making relatively more selective. Also, the recent surge in AI-driven demand has resulted in tran- sition-enabling assets, such as battery energy stor- age systems (BESS), data centres and grid expansion, attracting deep pools of capital in Japan. 1.2 Energy and Infrastructure Trends Japan has locked in the GX (green transformation) policy architecture. The Cabinet approved the GX 2040 Vision and the Seventh Strategic Energy Plan on 18 February 2025, framing simultaneous goals of energy security, growth and decarbonisation. Also, carbon pricing got teeth: the voluntary GX-ETS (Emis- sions Trading Scheme) moves to a mandatory ETS from FY 2026 and a fossil-fuel levy (GX surcharge) starts in FY 2028, which will be a clearer price sig- nal for long-life assets and industrials. Deal models now explicitly price the GX-ETS pathway (compliance exposure from FY 2026, levy from FY 2028) in mid-/ late-life cash flows and capex plans. Japan has advanced transition finance alongside sov- ereign Climate Transition Bonds, giving public sector ballast and a template for private funding structures. Lenders increasingly require credible, Paris-aligned transition plans to unlock pricing and size. Some market participants have been concerned about the potential adverse impact by the recent pol- icy changes in the US, but, so far, the Japanese gov-
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