Our Service

IDI provides a full range of services to fulfill client needs from industry trend research and analysis and management strategy formulation to financial advisory services related to execution of concrete action plans. Our client base is primarily in the electrical power, gas, and other energy fields, but it also extends to the associated environmental fields.
As the energy industry has come to an age of transformation, the uncertainty surrounding its business environment has increased, calling for thoughtful and sound decisions.
In order to make thoughtful and sound decisions under such an environment, we believe that it is important to have an effective decision-making process where all parties concerned cooperate in creating value towards a common goal.
For this reason, we must first clearly define the problem, and then create a decision-making mechanism that has taken into account the strategic alternatives generated by rational value judgment models.
At IDI, we provide comprehensive support to such effective decision-making processes, while utilizing our knowledge in the energy industry and know-how acquired through various advisory projects to provide advisory services that contribute to the value creation for clients.

Our Service

Strategic Consulting

COO

Isamu Tamura

Strategic Consulting within the Energy Sector

In the past, the main driver of Japan's energy policy has been securing a stable supply of energy (energy security). However, recent changes such as deregulation of the energy sector, global warming, and increased volatility of fuel prices have prompted the necessity for policy-makers to consider such aspects as market efficiency and environmental value. Therefore, a new management style is necessary where both public interests such as supply stability and environmental value, as well as private interests such as market efficiency are taken into account. Also, the deregulation of the energy industry has led to an increase in the number of new market-entrants, while increased awareness to environmental issues have triggered development in new energy businesses. Such new developments in the industry call for new fields of consulting services.

In addition to our consulting experience gained through servicing major players of the energy industry, IDI can also provide a unique consulting service based upon our hands-on experience with clients in new energy fields (such as hydroelectric power, wind power, and solar power).

Major Project Themes and Track Record

Research/Business Strategy/Scenario Planning

Since the first deregulation of the energy industry until today, we have been providing advisory services towards clients facing management challenges stemming from the constant changes accompanying liberalization. We utilize such experience to provide support in fields such as research of past cases both domestically and internationally, research on consumer demand, and scenario planning of business strategies.

Research
Electric Power and Gas
Research global trends on upstream interests in the value chain
Research U.S. and European electricity companies' strategies for dealing with industry deregulation
Environment and New Energy
Research electricity consumers’ awareness towards the reduction of carbon emissions
Research players in the solar photovoltaic power generation sector
Business Strategy /
Scenario Planning
Electric Power and Gas
Construct mid to long-term scenarios of electric power and gas industries
Analyze the competiveness and reconstruction of power generation portfolios
Environment and New Energy
Construct scenarios for the energy industry operating in a future setting more interrelated with the environment

Pricing Strategy

Under scenarios of industry liberalization, various internal and external risk factors such as competition and consumer trends needs to be assessed when formulating pricing strategies of electricity. As the only consulting firm that specializes in the energy industry in Japan, we can provide a more concrete pricing strategy based on our experiences of constructing and implementing an electricity-pricing model.

Electric Power and GasS
Formulate a wholesale pricing model for the Japanese market which simulates various scenarios caused by liberalization (Market Clearing Price Model)
Analyze trends in the wholesale electricity market (JEPX) and fuel trading market
Formulate strategy for electricity sales including long-term private contracts and retail sales

New Business Strategy / M&A, Alliance Strategy

From M&A and alliance strategy associated with leveraging of the core business and corporate defense, to corporate infrastructure construction, feasibility study and alliance strategy associated with new market entry, we provide total support from overall strategy formulation to the selection of alliance partners and due diligence.

Electrical Power and Gas
Conduct due diligence on local gas companies
Formulate alliance strategies for gas pipelines
Environment and New Energy
Conduct feasibility study on waste power generation in Japan

Financial Advisory / M&A Advisory

Supervisor

Kazuhiko Kazama

Financial Advisory Service

There is an increasing financing need in the energy industry, reflecting the movement toward the new construction of power plants triggered by the increasing demand for electricity and the implementation of FIT. Based on its knowledge and strong relationships gained through years of experience, IDI will provide financial operations support in fields such as business restructuring and new business development to realize business strategies of clients.

IDI's financial advisory service has as its foundation, the financial knowledge and networks of professionals with backgrounds in finance institutions. In addition, our personnel, some with over 10 years of experience in the energy industry and others with consulting experience, enables us to provide services in business restructuring and new business development to realize business strategies of clients.

Major Project Themes and Track Record

We provide comprehensive support for various needs of our clients including corporate finance, project finance, and M&A.

Fund Raising

Strategy
Formulate fund-raising strategy advice that optimally combines various fund-raising methods
Support construction of an appropriate scheme to realize efficient fund-raising for each project
Feasibility Study
Support feasibility study for entire businesses
Selection of and Correspondence with Candidate Investors
Select candidate investors corresponding to risk and return for each project
Support creation of information memorandum following fund raising
Support Q&A process with candidate investors
Evaluate adequacy of investment terms
Operational and Other Support
Provide comprehensive operational support for fund-raising
Communication Strategy
Provide IR support towards financial institutions and investors

Financial Restructuring

We support redesigning and restructuring of the balance sheet for clients encountering difficult financial conditions (e.g. excessive borrowing versus cash flow, breach of financial covenants, poor cash flow).

  • Support research and assessment of cash position and capital needs
  • Support monitoring and formulation of cash management systems and cash management plans
  • Support implementation of measures to increase usable cash (curtailing collection period of receivables, disposing of unnecessary assets)
  • Support formulation of business and financials plans with high objectivity
  • Provide support to identify unnecessary businesses or bad assets for divesture
  • Support negotiations with lenders on refinancing

M&A Advisory

In the energy sector, M&A has been considered a measure for tackling various situations including penetration into the upstream business (resource development and procurement) for securing and Diversifying supplies of raw materials, expansion into different geographic areas either in Japan or overseas, convergence of the energy industry (entry into other energy businesses), and formation of alliances to succeed against intensifying competition. Through its experience in consulting in the energy sector and fund-raising advisory services such as for project finance, IDI has acquired knowledge of the energy business and industry structure, as well as developed networks in the industry.

Through our strong commitment to the energy business and industry, we have developed a deep understanding of the business and fostered relationships with companies in the industry. Our strength is in providing and realizing such M&A services that take into account IDI's understanding of the energy industry.

Major Project Themes and Track Record

Utilizing our knowledge and network achieved through providing fund-raising advisory and consulting services in the energy sector, we provide a one-stop support service from (i) strategy formulation and due diligence for M&A activity both in Japan and overseas, (ii) selection of appropriate business partners utilizing our deep-rooted relationships in the industry, (iii) provision of maximum support in realizing deals based on our strong commitment to the business, to (iv) business models construction for both pre-merger and post-merger situations.

Takeover Protection

Provide advisory services for countermeasures against takeovers by electric power companies

Pre-Merger Advisory

Facilitate clients' understanding of the industry structure to promote deal creation(create industry reports)

Support construction of business models that enable clients' realization of new market entry utilizing M&A

  • Formulate M&A strategy based on industry scenarios
  • Create propoamp;sals based on our deep understanding of the industry and business
  • Strategicallamp;y invite investors utilizing our knowledge and perception of the industry
  • Construct caamp;sh flow projections based on industry scenarios that take into account business trends of regulatory authorities and industry players
  • Provide compamp;rehensive services from formulation to valuation of business strategies, and formulation to execution support of financial strategies/li>
  • Provide straamp;tegy formulation for execution of: capital (and business) alliances, sale of businesses (including partial sales), and buyouts

Post-Merger Advisory

Support value improvement of client's business, post investment

Overseas Support

Supervisor

Hirofumi Inoue

Support Overseas Business within the Energy Sector

We believe that the overseas business is becoming increasingly more important in the energy sector through fields such as new energy, environment, and fuel procurement.
Combining our overseas alliances and research experience on overseas business cases with our know-how and network, IDI not only provides this know-how and advisory services to assist Japanese clients in advancing overseas, but also promotes the development of energy and environment sectors in Asia through our work in the investment fund business with Japan Asia Investment Co., Ltd. (JAIC).

Major Project Themes and Track Record

Providing Overseas Know-how to Japanese Companies

In 2003, the year in which IDI was established, liberalization of the electrical power industry in Japan started to gain momentum, and formulating strategies for companies to adjust to such liberalization became a major theme for the energy industry.
Against this backdrop, we have studied the implications of such liberalization in Japan by researching the models in Europe and the U.S. where liberalization of the industry is further along, and by researching measures implemented by companies in these countries to deal with liberalization. At the same time, we have been providing services such as strategy formulation consulting for energy companies by developing and implementing a MCP Model (a model for estimating medium-to-long term wholesale electrical power prices, which has a proven track record overseas) for the Japanese market, and conducting quantitative analysis based on future scenarios.

Advising Japanese Companies on Advancement Overseas

Japanese companies in the energy sector are constantly searching for a chance to advance and develop their business overseas.
With our focus on Asia, where energy and environment fields have been developing remarkably in recent years, IDI supports such overseas advancement of our clients.
For instance, we provide comprehensive services from financial advisory regarding investment into Asia by Japanese companies to post investment hands-on support.

Providing overseas network

The recent development of energy business in Asia has been remarkable. IDI provides support to overseas energy companies in formulating schemes which enable fund raising, invite strategic investors, and create emission rights credits.
Through the alliance with group companies, we started an investment fund targeting the energy and environment sectors in Asia. We are promoting business support mainly in Asia for projects such as small scale hydro-power plants in Indonesia and biomass power plants in Thailand.

Climate Change Mitigation

Supervisor

Masao Tomizawa

Procurement and Utilization of Emission Rights

Energy consumption from our everyday life and social economic activities is essential to our lives. However, carbon dioxide emissions associated with such energy consumption negatively affects our environment in the form of global warming. As stated in the Kyoto Protocol adopted in 1997, our major challenge today is to promote sustainable development of the world while preventing global warming.
At IDI, we combine our wealth of experience in consulting and investment advisory services for major industry players with our knowledge of countermeasures against global warming and procurement of emission rights to solve problems for our clients and to contribute to the improvement of environmental quality of the world.

Our Services

Procurement support of Emission Rights

Taking full advantage of our network with overseas host countries, we support procurement primary emission rights with a high probability of delivery as well as secondary emission rights. We also provide support on finding and developing greenhouse gas reduction projects scheduled to be in operation after 2013.

Introduction and Development support of CDM/JI Projects
Support finding and developing of projects that have high probability of success, utilizing agents posted in Middle and Eastern Europe, China, and Southeast Asia
Provision support of CER/ERU/AAU etc.
Support provision of secondary credits by utilizing our network of providers around the world
Support provision of credits from projects invested and developed by IDI
Support provision of credits sourced from providers around the world

Utilization of Emission Rights

We provide support on formulating strategies which actively promotes environmental branding such as management of emission rights procured by our clients and CSR.

Operation and Management
Provide tax and accounting services support
Provide account management services support
Optimization of Portfolio
Support construction of risk management methods and tools which take into account market trends
Support development of hedging products which takes into account price fluctuation trends
Formulation of Strategies to Increase Added Value for the Environment
Support strategy formulation on CSR that highly appeals to clients
Support development of products such as carbon offset that increase added value for the environment

Market Trend Analysis on Emission Rights Business

Uncertainty over the post Kyoto Protocol commitment period starting in 2013 is increasing. Japan has decided not to set a target for the second commitment period. On the other hand, EU-ETS will move to the 3rd phase, while New Zealand will continue to participate and other countries such as Australia, China and Korea are planning to establish their domestic emission rights trading systems.
As you can see, the environment around emission rights and counter measures against global warming is changing rapidly. Therefore, it remains important for the globally operating companies to take actions to these issues.
IDI provides support in formulating strategies to fight against future global warming issues for our clients by researching the current state and future trends of the external environment of emission rights businesses in Japan and overseas.

External Environment Research
Research trends on global warming countermeasures in Japan and overseas
Research trends on emission rights market
Provide other research services such as trends on products related to emission rights