In October, Jefferies and SMBC co-hosted a forum for senior executives from leading Japanese corporations and investment firms. The event, titled “How to Commercialize the Japanese Energy Transition,” examined how companies can monetize opportunities tied to the global transition and Japan’s Green Transformation (GX) Plan, a $1 trillion initiative to reduce emissions over the next decade.
During one panel, “Capital Formation, Fundraising, and M&A to Accelerate the Energy Transition,” senior leaders from KKR, TPG, Jefferies, and Twelve Inc. discussed a major shift underway in global energy-transition finance. The group focused on what is pushing the transition forward — and what is slowing it down — as unprecedented electricity demand from hyperscaler data centers and rapid AI adoption begins to reset everyone’s priorities.
The panel featured Tracy Wolstencroft, Senior Adviser with TPG Rise Climate; Emmanuel Lagarrigue, Global Co-Head of Climate for KKR; Twelve Inc. Chief Financial Officer Jimmy Chuang; and Jefferies Managing Director Jeff Tang.
Hyperscales Drive A New Wave of Energy-Infrastructure Buildout
Mr. Wolstencroft stressed that the U.S. transition story is gaining strength. Citing earlier speakers, he described a shift “from energy transition to energy addition and from clean transition ambition to practicality.”
AI’s rapid growth is forcing companies such as Google and Microsoft to secure long-term, cost-stable power supplies. That push is accelerating solar development and large-scale data-center construction.
“Hyperscalers need electrons, and they need them right now,” Mr. Wolstencroft said.
Scaling Companies — Not Capital — Is the Problem
When the conversation turned to the market’s “missing middle” challenge, Jefferies’ Mr. Tang reframed the issue.
“Many people think of the missing middle as a lack of capital for a certain type of company. And I would like to challenge that and say that it’s not, in my view, so much like capital,” he said. “It’s a lack of companies that are able to reach escape velocity and reach the type of performance that can access this type of capital.”
Capital is available, he argued, but companies need more time to develop into organizations that can use it effectively. “I don’t really think of it as missing capital, it’s more missing progress,” Mr. Tang explained.
Twelve Inc. Shows What Scale-Ready CLimate Hardware Looks Like
Panelists pointed to Twelve Inc. as a strong example of a company built for scale. “Tweleve is a great example of what is required to get these capital-heavy businesses to scale . . . the path toward competitive unit economics is front and center,” Mr. Wolstencroft said.
Twelve Inc.’s Mr. Chuang noted that Twelve is essentially sold out through 2030, adding, “we’re at a point where we can deploy our product to the world at a commercial scale.”
“This year we can start flying regularly with airlines . . . and they’ll be the world’s first CO2-to-fuel powered commercial flight,” he said. The company illustrates the level of investment required to bring next-generation decarbonization technologies to market.
Corporate Partnerships and Demand Unlock Financing
Referencing Twelve Inc.’s model, investors emphasized how corporate demand enables companies to secure low-cost project financing. Discussing airline interest, Mr. Lagarrigue noted: “British Airways, Microsoft, Alaska Airlines [are] providing that signal that enables the company to have access to very low cost of capital.”
Panelists also stressed the role financial institutions play in connecting corporate buyers with emerging suppliers. “Your ability to put both sides of the problem into a room… demand and supply … is critical to scaling these industries,” Mr. Wolstencroft said.
The panel agreed that coordinated action among corporate buyers, developers, and financiers is central to advancing the transition.
Follow along for more insights from Jefferies’ Sustainability and Transition Team on the Japan GX Plan and other important climate investing themes in the weeks ahead.
