Entering the Renewable Energy Generation Business Through an Advanced Banking Service Company

The San-in Godo Bank, Ltd.

Outline

The San-in Godo Bank Group's management philosophy is to be ``a creative bank that fulfills the dreams of the region and customers we serve.'' We aim to resolve local issues locally, and even go beyond the region to resolve issues faced by society. We are disseminating concrete initiatives and models from San-in that will lead to this.

As part of this initiative, in July 2022, we established The Gogin Energy Co., Ltd., a company for the advancement of other banking businesses that operates renewable energy power generation businesses, the first regional financial institution to do so.

Our company develops and supplies renewable energy power sources that make the most of local renewable energy potential, and creates a regional cycle of green power and economy, thereby achieving regional independence and corporate value through decarbonized management. The aim is to improve local society and realize a prosperous and industrially competitive community.

Description

Our main businesses are (1) power generation business, (2) retail electricity business, and (3) environment-related consulting business that takes advantage of our renewable energy and energy-saving know-how.

In the power generation business, which is our main focus, we install solar panels free of charge on the roofs of electricity consumers' premises and factories. Electricity consumers consume the generated electricity for themselves and pay the electricity bill to us.

In addition, our group is participating as a co-proposer in three areas in both San-in prefectures (Yonago City, Sakaiminato City, Tottori City, and Matsue City) in the Ministry of the Environment's advanced decarbonization areas, and we are acting as a local power generation operator in each region. We are working hard to achieve regional decarbonization as early as possible through public-private collaboration.

[Future development of initiatives]

In order to achieve decarbonization and carbon neutrality throughout the region, efforts not only by the Bank Group but also by the entire region are essential. In order to create opportunities for this, our group will implement the following initiatives.

Private sector

In addition to quickly responding to PPA* business projects from business partners, we will proactively propose and introduce renewable energy to business partners who will be constructing new factories or locating businesses in the future. We support activities toward decarbonization and carbon neutrality.

By conducting consulting activities for business partners who wish to engage in renewable energy business on their own, we will expand our decarbonization efforts beyond the Bank Group's own efforts.

②Public sector

In regions that are ahead of the curve in decarbonization, we will work with local governments and related businesses to achieve regional decarbonization by 2030 and horizontally expand to other regions.

Interest in decarbonization is increasing in other local governments, and we are considering collaborating with multiple local governments. We will enthusiastically promote public-private collaboration towards regional decarbonization, including seminars and other awareness-raising activities, regardless of which regions are in the lead in decarbonization.

③Power generation method

Currently, we are focusing on on-site PPAs using solar power generation, but we are also specifically considering off-site PPAs based on the needs of utilizing idle land. Furthermore, as there are high expectations for small-scale hydroelectric power generation, wind power generation, and biomass power generation that utilize local resources, especially in hilly and mountainous areas, we aim to diversify the renewable energy power sources we provide and quickly realize regional decarbonization.

*PPA:Power Purchase Agreement. This is a contract for the sale of electricity, also known as a

third-party ownership model. Under this contract, PPA providers install power generation

equipment free of charge in buildings or on land owned by electricity consumers, and

electricity consumers purchase the power generated for use in their own consumption.