Special Feature

I would like to take this opportunity to thank all unitholders for the continued support you have shown this Investment Corporation.
The Investment Corporation generally benefited from favorable weather conditions during the 18th fiscal period, particularly in the first half of the period, and solar radiation levels remained strong. However, due to significant output curtailment, mainly in the Kyushu and Tohoku regions, actual electricity production for the period was approximately 8% below the forecast level. As a result, rental revenue linked to electricity production also declined. On the other hand, we worked to control operating expenses, including maintenance and repair costs, and ultimately recorded net income of ¥1,302 million, exceeding the forecast by ¥21 million.
With regard to distributions, the Investment Corporation adopted a policy in August 2024 of no longer assuming distributions in excess of earnings. In the 18th fiscal period, distributions within earnings amounted to ¥3,032 per unit. In addition, a distribution in excess of earnings of ¥9 per unit, primarily attributable to differences between tax and accounting treatment of depreciation expenses recorded for machinery and equipment, was paid. As a result, total distributions per unit amounted to ¥3,041, representing an increase of ¥59 compared with the initial forecast.
We will continue to work to strengthen our operating platform and improve the quality of our assets, giving the highest priority to ensuring stable returns.

The Investment Corporation continues to combine core external and internal growth strategies.
Regarding external growth, we will make maximum use of the development capability and pipelines of the Canadian Solar Group, our sponsor. At the same time, we will select investment opportunities, including third-party projects, to achieve disciplined expansion.
Regarding internal growth, we are considering the partial replacement of older modules with high efficiency panels at certain solar power plants as part of equipment upgrades, in an attempt to maximize production. Additionally, in light of the considerable impact of output curtailment in the 18th fiscal period, we are looking to prevent future output curtailment from reducing our revenue and seeking to maximize our revenue opportunities. Taking into account the new priority dispatch rules in each area, we are considering various options based on proposals from operators. These include shifting from FIT to FIP, signing corporate PPAs (power purchase agreements with corporate customers), and installing battery storage systems in parallel. We aim to create a portfolio that balances stability and growth potential based on the VISION 2030 theme of developing new revenue opportunities for the post-FIT era. I intend to announce further details in this regard as soon as a concrete schedule for implementation is set.
Additionally, in light of recent cable theft incidents, we plan to trial an AI-based monitoring service at certain solar power plants.

In the 18th fiscal period, output was considerably impacted by output curtailment, especially during April and May, reflecting seasonal factors and an increase in renewable energy power generation facilities. Lost variable rent income due to output curtailment during the 18th fiscal period amounted to 814 million yen. In the 18th fiscal period, the impact of output curtailment also spread nationwide, with implementation not only in the Kyushu and Tohoku regions but also in the TEPCO service area for the first time. The Investment Corporation is actively considering shifting from FIT to FIP and installing battery systems at portfolio properties to prevent such output curtailment from impacting its revenue, as described in the above growth strategy.