JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SECOND PARTY OPINIONJERA CO., INC.
JERA SUSTAINABLE FINANCE FRAMEWORK

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 22 Nov 2023
Ref. Nr.: PRJN-333948-2022-AST-JPN-01̲Rev3.0

This report was additionally reviewed in November 2023 as Revision 3, in line with the revision to the "JERA
Sustainable Finance Framework," which adds green finance etc. to the "JERA Transition Finance Framework."

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Contents
Executive Summary

4

I. Introduction

11

II. Scope and Objectives

26

III. Responsibilities of JERA and DNV

28

IV. Basis of DNV s Opinion

28

V. Work Undertaken

31

VI. Findings and DNV s Opinion

32

VII. Assessment Conclusion

49

Schedule-1 JERA Sustainable Finance Nominated Eligible Projects

51

Schedule-2 Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs)

52

Schedule-3 Sustainable Finance Framework Eligibility Assessment Protocol

53

Schedule-4 Sustainable Finance (with specific use of proceeds) Eligibility Assessment Protocol

61

Schedule-5 Sustainable Finance (with general corporate purpose) Eligibility Assessment Protocol

69

Revision history
Revision number

Date of issue

Remarks

0

14/2/20221

12/5/20222

19/8/2022

InitialUpdate descriptions related to "Process for Project Evaluation and Selection" and"Management of Proceeds" due to JERA's business execution system changes in April
2022.
Addition of eligibility assessment for additional target disclosures related to transition
strategies due to the establishment of the "JERA Environmental Target 2035" andthe update of the "JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan" in May 2022.
Addition of assessment against the revised "JERA Transition Finance Framework"(August 2022) to the existing "JERA Transition Bond Framework" (May 2022) withthe addition of the four elements for executing transition loans, which are Use ofProceeds instruments, and the five elements (KPI/SPT, etc.) for executing transitionlink bonds and loans, which are General Corporate Purpose instruments.

3

22/11/2023

Addition of assessment on revised "JERA Sustainable Finance Framework"(November 2023), due to the addition of Green Finance (renewable energy andstorage batteries) to existed "JERA Transition Finance Framework" (August 2022)
and revision of CTFH, SLBP, GLP and SLLP.

Disclaimer
Our assessment relies on the premise that the data and information provided by Issuer to us as part of our review procedures have been provided in good faith.
Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable risk thaterrors or irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures and limited
sampling at lower levels in the organization were applied as per scope of work. DNV expressly disclaims any liability or co-responsibility for any decision a person or anentity may make based on this Statement.

Statement of Competence and Independence
DNV applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2011 - Conformity Assessment Requirements
for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control, including documented
policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have compliedwith the DNV Code of Conduct1 during the assessment and maintain independence where required by relevant ethical requirements. This engagement work was carriedout by an independent team of sustainability assurance professionals. DNV was not involved in the preparation of statements or data included in the Framework except
for this Statement. DNV maintains complete impartiality toward stakeholders interviewed during the assessment process.

1 DNV Code of Conduct is available from DNV website (www.DNV.com)

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Executive Summary*This report (Revision 3) is an additional assessment taken place in line with the revision tothe "JERA Sustainable Finance Framework," which adds green finance etc. to the "JERATransition Finance Framework."
JERA Co., Inc. (hereinafter, JERA, including JERA Group) was established on April 30, 2015
to form a comprehensive alliance between Tokyo Electric Power Company (as it was knownthen) and Chubu Electric Power Co., Inc. for their entire supply chains from fuel upstream
and procurement business to power generation. JERA established a unified, continuous
value chain from fuel upstream and procurement business to power generation andelectricity and gas wholesaling, earning its status as an energy company with power
generation capacity equivalent to half of Japan s thermal power generation output and a fueltransaction volume among the world s highest. JERA engages in borderless management of
all businesses from fuel procurement to power generation and sales in three profit centers,
which are "Fuel Business," "Overseas Power Generation and Renewable Energy Business,"and "Domestic Thermal Power Generation and Gas Business," to establish a system capableof pursuing expertise and excellence and maximizing synergy in each business.
JERA has established "JERA Zero CO2 Emissions 2050" in October 2020, the goal ofachieving zero CO2 emissions by 2050. Under "JERA Zero CO2 Emissions 2050", JERA willtake on the challenge of achieving, by 2050, virtually zero CO2 emissions from JERA s
operations in Japan and overseas by taking the three following approaches: 1. Combining
Complementarity Renewable Energy with Zero-CO2 Emission Thermal Power, 2.
Establishment of Country and Region-Specific Roadmaps and 3. Ensuring Smart Transitions.
In addition, JERA established "JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan" that shows a pathway toward CO2 zero emission by 2050 of its business in Japan. To
promote CO2 zero emissions in domestic operations in accordance with this roadmap, JERA
has formulated "JERA Environmental Target 2030" as new environmental goals of FY2030
for its domestic operations. According to "JERA Environmental Target 2030", JERA has
committed to reducing CO2 emission intensity by 20% compared to that of thermal power
plants in Japan as a whole, based on the long-term energy supply and demand outlook for
FY2030 set by the government. JERA also committed to shutting down/decommissioning all
inefficient (supercritical or less) coal-fired thermal power plants.
As stated in "JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan", in order toachieve the realization of CO2 zero emissions, JERA will promote various R&D, verification,
introduction of technologies and facilities. Meanwhile, until the technologies and facilities arepractically available, JERA will pursue the CO2 emission reduction in the medium-term by
utilizing the decarbonization technologies. These efforts comply with the philosophy of
Climate Transition. "JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan" isconsistent with the transition roadmap for the electricity sector, which was developed by the
Ministry of Economy, Trade and Industry (hereinafter, METI) in February 2022 with the aimof promoting transition finance. JERA's roadmap also includes representative transition
projects and ambitious goals outlined in the globally recognized handbooks, principles or
guidelines related to transition finance.
In May 2022, JERA added a target to accelerate further its efforts to achieve the realizationof CO2 zero emissions, aiming to reduce CO2 emissions from domestic operations by at least
60% (relative to FY2013) by FY2035 with the establishment of the "JERA Environmental
Target 2035" and the update of the "JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan". Furthermore, JERA has developed a more ambitious transition strategy,
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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

including clarifying the timing of full-scale operation at 20% and 50% ammonia co-firing
rates in thermal power generation, consistent with the transition roadmap for the electricity
sector of METI.
JERA has now revised the previous framework into the "JERA Sustainable Finance
Framework" (hereinafter, the "Framework") in order to implement financing that contributes
to the realization of "JERA Zero CO2 Emissions 2050" in a manner that is compatible withadditional green finance and compliant with various international frameworks which were
updated in 2023.
The Framework is structured as a comprehensive framework that includes the following
elements required for finance implementation:-

Green finance (green bonds and loans)

Transition finance (transition bonds and loans with specific use of proceeds andgeneral corporate purpose)
DNV Business Assurance Japan K.K. (hereinafter, "DNV"), as an external reviewer,
evaluated the eligibility of the Framework.
Specifically, DNV provided the eligibility evaluation for the Framework against the following
handbooks, principles and guidelines which are widely recognized:- Climate Transition Finance Handbook (CTFH) International Capital Market Association(ICMA), 2023
- Basic Guidelines on Climate Transition Finance (CTFBG) Financial Services Agency,
Ministry of Economy, Trade and Industry, Ministry of the Environment, 2021
- Green Bond Principles (GBP) International Capital Market Association (ICMA), 2021
- Green Bond Guidelines and Sustainability-Link Bond Guidelines (GBGLs/SLBGLs)
Ministry of the Environment, 2022
- Green Loan Principles (GLP) Loan Market Association (LMA) etc., 2023
- Green Loan Guidelines and Sustainability-Link Loan Guidelines (GLGLs/SLLGLs) Ministryof the Environment, 2022
- Sustainability-Link Bond Principles (SLBP) International Capital Market Association(ICMA), 2023-

Sustainability-Link Loan Principles (SLLP) Loan Market Association (LMA) etc., 2023

The following is a summary of the assessment results for each common element indicated in
the above handbooks, principles and guidelines.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion<CTF Eligibility Assessment Results>
CTF-1 ~ CTF-4 are findings and opinions of DNV against the four common elements of the
CTFH and CTFBG (disclosure elements).
CTF-1. Fundraiser s Climate Transition Strategy and Governance:
The Fundraiser, JERA, has set a long-term goal of "JERA Zero CO2 Emissions by 2050,"
which is consistent with the goal of the Paris Agreement and has created "JERA Zero
CO2 Emissions 2050 Roadmap for its Business in Japan" to set a mid-term target of
60% reduction of domestic CO2 emissions by 2035 in terms of absolute GHG
emissions. This is in line with the pathway stated in the transition roadmap for theelectricity sector of METI and is science-based. It also discloses the main means of
reducing GHG emissions to achieve this goal. Moreover, given the fact that indirectemissions from power generation accounts for 38% of the CO2 emissions per final
energy consumption in Japan where JERA operates in, the transition strategy of JERA,
whose major emissions come from its thermal power generation, will not only
contribute to the emissions reduction from its own business activities (Scope 1 and 2),
but also the achievement of the decarbonization goals of diverse entities. In terms ofgovernance and disclosure related to the implementation of transition finance, aninternal structure and information disclosure process based on TCFD*1 have been
established and investment plans are also being developed. These are disclosed within
the Framework and other documents and meet the disclosure element CTF-1.
*1: Task Force on Climate-related Financial Disclosures

CTF-2. Business Model Environmental Materiality:
JERA identified materiality in order to simultaneously solve social issues and increase its
medium-to-long-term corporate value. JERA also utilizes the analysis and evaluation
methods based on GRI Standards*1, ISO 26000, TCFD, etc. As part of its efforts toaddress environmental materiality, the activities contributing to transition, such as"Adopt and Expand Renewable Energies" and "Decabonization of Thermal Power andFuel Supply Chains," are included. Furthermore, the contribution to the SDGs (seebelow) is also taken into account. These are disclosed within the Framework and otherdocuments and meet the disclosure elements CTF-2.
*1: An international standard providing ESG-related reporting, management, and analysis methods, establishedby Global Reporting Initiatives.

CTF-3. Climate transition strategy to be science-based including targets andpathways:
JERA's transition strategy is formulated in consistency with the transition roadmap forthe electricity sector of METI as described in CTF-1. The transition roadmap for theelectricity sector refers to the Sixth Strategic Energy Plan, which is in line with the Plans
for Global Warming Countermeasures. These are established based on Japanese
government s aim to achieve carbon neutrality in 2050 and to reduce greenhouse gas
emissions by 46% in 2030 compared to the FY2013 level in refer to IPCC 1.5°C Special
Report. These are consistent with the Paris Agreement.
In JERA's transition strategy, the medium- and long-term goals to reduce CO2 emissions
from company s activities, including the use of future CO2 capture technology, areindexed and quantified while the process of achieving those goals is clarified. Also,
Scope 3-related categories are presented. Moreover, "JERA Environmental Target 2035"
and "JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan", released in
May 2022, provide additional disclosure of mid-term targets including absolute amountof emissions. These are disclosed in JERA Group Integrated Report, the Framework, etc.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

or this second party opinion, and meet the disclosure elements CTF-3. Please note thatno decisions have been made regarding the use of carbon credits at this time.
CTF-4. Implementation Transparency:
DNV confirmed that the investment and project plans related to JERA's transition
strategy include an overview of investments made to date and consensus on future
investments and expenditures, as well as their outcomes and impact. The plan includes
investments of around 650 billion yen in green projects, mostly renewable energy andrelated to decarbonization, and the phasing out of projects that do not meet transitions(e.g., shutting down inefficient coal-fired power plants). DNV also confirmed that theoverall investment plan (investment amount) will be executed in accordance with thetimeline. Moreover, in order to ensure transparency, JERA will discuss on the disclosure,
wherever possible, of its basic investment plan (investment amount). At present, theinitiative does not take into account internal carbon prices. DNV also reviewed the
Framework and the ESG management of JERA and confirmed high transparency in theimplementation. JERA explained the appropriateness of its execution to DNV and DNVagreed on the appropriateness. These meet the disclosure elements CTF-4.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion<GBP/GLP Eligibility Assessment Results>
GBP/GLP-1 ~ 4 are findings and opinions of DNV against the four elements of GBP/GBGLs
and GLP/GLGLs considering Sustainable Finance with Specific Use of Proceeds.
GBP/GLP-1. Use of Proceeds:
JERA defined the project categories of the use of proceeds as the projects (transition
projects and green projects) to realize zero CO2 emissions from thermal power
generation. Specifically, the Eligibility Criteria are presented in the Eligible Project
Categories, which are categorized into the initiatives listed below, and will be used tofund one or more of these R&D, capital/facilities investments, operations andrenovations, investments, and other related expenditures, either as new expenditures or
as refinancing for existing expenditures. DNV has confirmed that these transition
projects and green projects are consistent with the elements CTF-1 to 4. The transition
projects and green projects have been evaluated by JERA as having clear and positiveenvironmental impacts in line with the transition strategy and are expected to contributedirectly and indirectly to the SDGs. These projects are aligned with GBP-1. Below is an
overview of the projects to allocate the proceeds, including the transition bond issued in
2022.
Table-I JERA Sustainable Finance Eligibility Criteria
Project Category

Eligibility CriteriaThe expenditures related to demonstration
projects to substitute ammonia/hydrogen forfuels at thermal power plants

The expenditures related to decommissions ofinefficient thermal power plants, with the aimof replacement for high-efficiency thermal
power plants

The expenditures related to renewable energy(onshore/offshore wind, solar)The expenditures related to battery storage(*)

Transition project
Projects for the realizationof zero CO2 emission
thermal power

Green project
Renewable energy
ICMA GBP:
Renewable energy(Environmental
objectives: Climatechange mitigation)

Alignment with
the SDGs

Green Finance: only green projects can use the proceeds
Transition Finance: where the proceeds are used for either or both transition and green projects*Storage batteries may be classified as transition projects in addition to green projects, if they are foundto comply with the electricity roadmap etc.

GBP/GLP-2. Process for Project Evaluation and Selection:
In addition to confirming that the transition projects and green projects meet the GBP-1
eligibility project categories, JERA will also confirm that potential negativeenvironmental/social impacts are taken into account, and that the procedures ofequipment certification, licensing and environmental assessment in the regions where
the projects are to be implemented are appropriate. Specifically, eligible projects are
selected by the Global Finance Group and the final decision is made by the Head of the
Global Finance Group after comprehensive analyses and reviews of the financial risks,technical and operational risks, market environment and ESG risks carried out by related
business department. The process is consistent with GBP-2.
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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

GBP/GLP-3. Management of Proceeds:
JERA's Global Finance Group will manage the allocation of the net proceeds of
Sustainable Finance on at least an annual basis, using the internal accounting
management system until the proceeds have been fully allocated. The proceeds aremanaged in cash or cash equivalents in an amount equal to the unallocated proceeds
until the proceeds have been fully allocated.
GBP/GLP-4. Reporting:
JERA will report the allocation of the proceeds (allocated/unallocated amounts,
new/refinancing) of the Sustainable Financeon JERA s website annually until theproceeds have been fully allocated to Eligible Projects. In addition, the outline of the
projects been allocated and their positive environmental impacts will be disclosed on the
JERA's website to the extent practicable (in terms of the positive environmental impacts,
outline and the progress of the eligible projects will be included). Moreover, JERA will
disclose timely or in its reports in the event of significant changes in transition strategy
or pathway, or significant changes in allocation plans or results.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion<SLBP/SLLP Eligibility Assessment Results >Followings (SLBP/SLLP-1〜SLBP/SLLP-5) are findings and opinions of DNV against the fiverequirements of the SLBP, SLLP, SLBGLs, and SLLGLs for sustainable finance (transition-linked
finance), which is general corporate purpose.
SLBP/SLLP-1. Selection of Key Performance Indicators (KPIs):
The KPI on transition (JERA Group's domestic CO2 emissions intensity) shown in Table-II
is an important indicator for achieving zero emissions by 2050, which JERA is promoting
as the largest power generation company in Japan. DNV concludes that the selection of
KPIs was a rational process and that the KPIs are clearly defined, measurable andverifiable, and robust and reliable.
SLBP/SLLP-2. Calibration of Sustainability Performance Targets (SPTs):
It was confirmed that the achievement of JERA's SPT (JERA Group's domestic CO2
emission intensity) shown in Table-II is consistent with JERA's efforts to achieve zero
emissions by 2050.
The SPT is set at a value of 0.477 kg- CO2 /kWh or less after a further 20% reduction
from the estimated national emissions intensity from thermal power generation, basedon the estimated value of CO2 emissions from electricity-derived energy, total electricity
generation, and the ratio of thermal power generation in the "2030 Outlook for Energy
Supply and Demand" released by the Japanese government in October 2021, therefore
it was confirmed that the SPT is more ambitious than the national goals and goesbeyond "Business as Usual."
DNV confirmed that JERA, as the largest power generation company in Japan, has madevarious calculations and studies on how to achieve zero emissions from thermal power
generation (reduction of emission intensity, which is the SPT for this project, andreduction of CO2 emissions from domestic operations by at least 60% by FY 2035, which
is separately specified) while fulfilling its responsibility for stable energy supply, and
JERA has set the SPT as an ambitious goal required for transition-linked finance, and asa feasible goal that can be guaranteed with probability. SPTs are not set on an annual
basis in light of the need to respond to electricity supply and demand, etc., but theirprogress is verified annually by an external organization.
In addition, in the future, it is expected that "CO2 emissions ▲60% or more by 2035
(compared to FY 2013)," a new target set in the roadmap, will be added as a KPI andSPT since it is an ambitious target compared to the national NDC and the "Energy
Supply and Demand Outlook for FY 2030.
SLBP/SLLP-3. Finance Characteristics:
The financial and structural characteristics of the sustainable finance, which is general
corporate purpose, executed under the Framework will change depending on theachievement of the SPT. JERA has internal procedures to ensure that each time afinancing is executed, the trigger event and its scope of impact with specific SPT
measurement timing and performance requirements will be linked to target achievement
and financial incentives, and details including conditions will be disclosed in the bonddisclosure documents or loan agreement documents. Changes in the characteristics ofthe bonds and loans may be foregone if there are reasonable grounds that theachievement of the SPT will be temporarily missed due to transient changes in domestic
electricity supply.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-4. Reporting:
The progress of the SPT against the KPIs required by the SLBP/SLLP will be published on
the website on an annual basis.
SLBP/SLLP-5. Verification:
JERA plans to have the progress of SPT against KPIs verified annually by an external
evaluation organization, etc.
Table-II JERA Transition Linked Finance KPIs and SPTs
KPIs

Scope 1 CO2 emissions intensity in JERA Group's domestic power
generation business
Scope 1 CO2 emissions intensity in JERA Group's（*1）domestic power generation businessin the relevant fiscal year（*2）

Definition of
KPI(*1) Equivalent to JERA s investment ratio in JERA Group Companies and Joint Thermal
Power Business(*2) Calculated on a sending-end power basis

SPTs

Definition of
SPT

JERA Group s domestic emissions intensity in FY2030 to be 0.477 kgCO2/kWh or less
The SPT is set at a value of 0.477 kg- CO2/kWh or less after a further 20% reduction fromthe estimated national emissions intensity from thermal power generation, based on theestimated value of CO2 emissions from electricity-derived energy, total electricity
generation, and the ratio of thermal power generation in the "2030 Outlook for Energy
Supply and Demand" released by the Japanese government in October 2021.
Specific trigger criteria for individual transition linked finance will be set by an appropriate
method around the SPT, and disclosed prior to the execution of the financing in the bonddisclosure documents or loan agreement documents.

On the basis of the information, including Framework, provided by JERA and the work
undertaken, DNV confirmed that the Framework and Transition Finance executed by thisFramework meets the criteria required by the relevant frameworks within CTFH/CTFBG,
GBP/GBGLs and GLP/GLGLs, SLBP/SLBGLs and SLLP/SLLGLs, and is eligible. DNV has
confirmed that any future financing by JERA is properly planned and expected to be
implemented in accordance with the Framework.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

I. Introductioni.

About the Fundraiser
JERA Co., Inc. (hereinafter, JERA, including JERA Group) was established in April 2015
as the company to realize the comprehensive alliance, related to the continuous value
chain from fuel upstream and procurement business to power generation and electricity
and gas sales, between Tokyo Electric Power Company (at the time of foundation of
JERA) and Chubu Electric Power Company. JERA established a unified, continuous value
chain from fuel upstream and procurement business to power generation and electricity
and wholesaling, earning its status as an energy company with power generation
capacity equivalent to half of Japan s thermal power generation output and a fueltransaction volume among the world s highest. JERA engages in borderlessmanagement of all businesses from fuel procurement to power generation and sales inthree profit centers, which are "Fuel Business," "Overseas Power Generation andRenewable Energy Business," and "Domestic Thermal Power Generation and Gas
Business," to establish a system capable of pursuing expertise and excellence andmaximizing synergy in each business.
Fuel Business:
Investment in fuel upstream and other businesses, fuel transportation, and fuel trading
Overseas Power Generation and Renewable Energy Business:
Investment in overseas power generation projects, etc. Development and operation ofrenewable energy in Japan and overseas
Domestic Thermal Power Generation and Gas Business:
Thermal power generation in Japan, fuel procurement, O&M engineering, sale ofelectricity and gas in Japan, etc.

ii.

Fundraiser's Initiatives for ESG/SDGs
JERA sets "To provide cutting edge solutions to the world's energy issues" as its
mission, and believes that it is important to fully understand and manage the impactof the external environment on JERA and the effects of its business activities on thesociety and the environment. JERA tackles to sophisticate the ESG initiatives together
with all value chain.
In order to simultaneously provide the solution for social issues and increase its
corporate value over medium-to-long-term, JERA identified the material issues(materiality) shown in Table-1 and aims to contribute to the achievement of the
Sustainable Development Goals (SDGs) set by the United Nations by promoting
sustainable activities that are integrated with its business activities.
Among all the material issues (materiality), the issue mainly relevant to thesustainable finance is "to tackle the climate change" as outlined in JERA's vision, "To
scale up its clean energy platform of renewables and low greenhouse gas thermal
power, sparking sustainable development in Asia and around the world," (see Table 1"3. Adopt and Expansion of Renewable energies" and "4. Decabonization of Thermal
Power and Fuel Supply Chains") and the relationship with the SDGs is summarized asfollows:

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Table-1 JERA's Mission, Vision, Material Issues (Materiality) and Relevant SDGs
MissionTo provide cutting edge solutions to the world's energy issues
VisionTo scale up its clean energy platform of renewables and low greenhouse gas thermal power,
sparking sustainable development in Asia and around the world
Material issues(Materiality)
Establish a
Stable Energy
Supply

●
◎
●
●
●
●

1

Major initiatives &KPIs(● Major Initiatives, ◎ KPIs)
Stabilize supply and demand management
Replace domestic facilities representing 7-9 GW ofenergy (at 5-7 sites)
Optimize security measures and monitoring
systems in line with global standards
Enhance JERA's business continuity plan (BCP) andbusiness continuity management (BCM)
Improve disaster preparedness through systematic
education and training
Build a disaster prevention infrastructure by
maintaining reserves

Create●Customer Value
through Cutting ●Edge Solutions●

Develop new technologies that can be spearhead asustainable society
Further innovate by combining new technologies
with power generation technology
Strategically acquire intellectual property in Japanand abroad and apply it to new business● Develop and deliver solution selling that ties in withcompany business23

Adopt andExpandRenewable
Energies◎ Target renewable energy development representing
5 GW of energy by FY2025● Acquire essential know-how about offshore wind
power

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Relevant SDGs

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Decarbonization ●of Thermal◎
Power and FuelSupply Chains

4

Establish hydrogen and ammonia supply chains
Utilize ammonia effectively, with demonstration
tests of conversion rates of 20% at Hekinan
Thermal Power Station Unit 4 planned for FY2023,
commercial operation of conversion rates of 20%
targeted for the late 2020s, and commercial
operation of conversion rates of 50% intended to
begin in the early 2030s◎ Utilize hydrogen effectively, with commercial
operation planned for the 2030s● Pursue carbon capture and storage (CCS) knowhow and project opportunities

Establish Global ●Corporate●
5 Governance●●Coexist andThrivealongside Local
Communities inJapan and●Abroad●6●

Improve board effectivenessInstill and put into practice a compliance culture
and strengthen the JERA Group compliance system
Make improvements to reporting of financial andnon-financial information
Take action to coexist with the environment,
educate the next generation, and resolve issues inlocal communities based on our Social Contribution
Activity Policy
Build good relationships with stakeholders throughcooperative efforts with the community
Strengthen systems for the prompt and proper
reaction in response to domestic and international
crisesPractice global corporate social responsibility (CSR)
founded on the needs of overseas sites

Realize New,●
Zero-Carbon
Energy Models
through Digital
Transformation ●7

Acquire cutting-edge IT technologies such as AI andmachine learning by upgrading our R&D
environment and building relationships with leading
technology companies, among other efforts
Establish the foundation for maximizing data usage,
defining parameters, and promoting data education● Promote the digitization of data at power plants,
including those overseas● Offer digital education to all employees

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Empower
Diverse Talent

8Create a Safeand
Comfortable
Work
Environment
9● Disseminate major talent initiatives both internallyand externally● Evolve and expand mechanisms to attract diverse
talent (e.g., broaden the pool of new graduate andmid-career candidates and strengthen partnerships
with educational institutions)● Establish systems that promote self-driven careerdevelopment (e.g., create structures for skill
advancement and career paths, provide
consultation services, and expand internal
promotion efforts)● Build attractive compensation packages (introduce
a job-based HR system, revise retirement benefit
schemes and seniority systems)● Realize borderless human resources (e.g., increase
global mobility irrespective of hiring location)● Cultivate corporate culture (e.g., promote diversity
and inclusion, health management)◎ Increase the percentage of female employees inleadership positions (targeting 15% in officer
positions and 8.5% in management positions by
FY2025)◎ Maintain and improve employee engagement(employee satisfaction survey index for FY2022:
68.8%)● Continuous leadership from top management andraising individual safety awareness● Construction of a robust management system tolead our safety efforts● Effective safety activities to address changes in theenvironment◎ Number of fatalities: 0● Establish contingency plans for overseas operations◎ Continued selection under the Certified Health &Productivity Management Outstanding
Organizations Recognition Program◎ Promotion of work-life balance (reduce overtime
hours, promote taking leave)

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinioniii. Fundraiser s Environmental Initiatives
Bearing in mind the promotion of decarbonization at low cost and high speed while
keeping a stable energy supply, JERA formulated "JERA Zero CO2 Emissions 2050" in
October 2020, to achieve zero CO2 emissions by 2050. It states that JERA will take on
the challenge of achieving, by 2050, virtually zero CO2 emissions from JERA s operationsin Japan and overseas by taking the three approaches as follows: 1. Combining
Complementarity Renewable Energy with Zero-CO2 Emission Thermal Power, 2.
Establishment of Country and Region-Specific Roadmaps and 3. Ensuring Smart
Transitions.
In addition, JERA established "JERA Zero CO2 Emissions 2050 Roadmap for its Businessin Japan" that shows a pathway toward CO2 zero mission by 2050 for its business inJapan. To promote CO2 zero emissions in domestic operations in accordance with thisroad map into practice, JERA has formulated "JERA Environmental Target 2030 " as its
new environmental goals as of FY2030. JERA committed to the achievement of thefollowing goals:① Decommission all inefficient coal power plants (supercritical or less) and conduct
demonstration tests of conversion to ammonia at high-efficiency (ultrasupercritical) coal power plants.
② Promote the development of renewable energy centered on offshore wind power
projects and work to further improve the efficiency of LNG thermal power
generation.
③ Reduce carbon emissions intensity of thermal power plantsby 20% based on thelong-term energy supply-demand outlook for FY2030 as set by the government.
(Table-2/Figure-1 and 2)
In May 2022, JERA established the "JERA Environmental Target 2035" and revise JERA
Zero CO2 Emissions 2050 Roadmap for Its Business in Japan to accelerate further its
efforts to achieve the realization of CO2 zero emissions and added its goal to reduce CO2
emissions from domestic thermal power generation by at least 60% (relative to FY2013)
by FY2035. JERA's roadmap is consistent with METI's transition roadmap for theelectricity sector by clarifying the timing of full-scale operation at 20% and 50%
ammonia co-firing ratio in coal-fired power generation, and is a more ambitioustransition strategy (Figure-1 & 2, Table-2). The JERA Zero CO2 Emissions 2050
Roadmap for Its Business in Japan states to promote CO2 emission reductions throughvarious research and development, demonstration, and introduction of technologies andequipment, as well as the use of decarbonization technologies in the medium term inorder to achieve zero CO2 emissions.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Figure-1: JERA's approach towards zero CO2 Emissions by 2050 (Decarbonization strategy)

Table-2 Approaches of JERA Zero CO2 Emissions 2050 (Decarbonization strategy)
Initiatives
JERA will take on the challenge ofachieving CO2 zero emissions fromJERA s operations in Japan and overseas
by 2050 through the achievement of its
mission, "To provide cutting-edge
solutions to the world's energy issues".
 Combining complementarity
Renewable Energy with Zero-CO2
Emission Thermal Power Establishment of Country andRegion-Specific Roadmaps
 Ensuring Smart Transitions
Promotion of zero CO2 Emission
Thermal Power and Renewableenergy Shut down all inefficient(supercritical or less) coal power
plants Demonstration tests of mixed
combustion with ammonia
 Implementation of mixed
combustion with Hydrogen Promoting offshore wind power

Goal
2050
Zero CO2 emissions
2035① Reduce CO2 emissions from domestic operations relative
to FY2013 by at least 60%② Strive to develop and adopt renewable energy in Japan,
given expanded adoption under the national government s
2050 carbon-neutral policy③ Commit to reducing carbon emissions intensity fromthermal power generation by promoting hydrogen andammonia conversion.
2030① Decommission all inefficient coal power plants(supercritical or less) and conduct demonstration tests of
conversion to ammonia at high-efficiency (ultrasupercritical) coal power plants.
② Promote the development of renewable energy centeredon offshore wind power projects and work to further
improve the efficiency of LNG thermal power generation.
③ Reduce carbon emissions intensity of thermal power plants
by 20% based on the long-term energy supply-demand
outlook for FY2030 as set by the government.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Figure-2: "JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan"

Table-3 JERA's non-consolidated greenhouse gas emissions in Japan
Scope

FY2020

FY2021

FY2022

Scope 1114.95 million t-CO2

121.10 million t-CO2

118.69 million t-CO2

Scope 280,000 t-CO2

40,000 t-CO2

60,000 t-CO2

Scope 330.41 million t-CO2

32.51 million t-CO2

31.21 million t-CO2

145.44 million t-CO2

153.65 million t-CO2

149.96 million t-CO2

Total amount

Scope 1: Direct emissions of greenhouse gases by the company itself (combustion of fuels, industrial processes).
(Calculated in accordance with the Act on Promotion of Measures to Cope with Global Warming (the Global
Warming Prevention Act))
Scope 2: Indirect emissions from the use of electricity, heat and steam supplied by other companies.
(Calculated using adjusted emission factors from the "Emission Factors by Electric Utility" published by the
Ministry of the Environment and the Ministry of Economy, Trade and Industry.
A part of the purchased electricity is replaced by self-transmission from 2021 onwards, and the selftransmission is included in Scope 1 emissions).
Scope 3: Indirect emissions other than Scope 1 and 2 (emissions from other companies related to the company s
activities)＊Data includes emissions of Hitachinaka Generation Co. Inc.
＊Scope 2 and 3 cover CO2 only. Scope 1 covers CO2, CH4 (methane), N2O (nitrous oxide), SF6 (sulphur hexafluoride)and HFC (alternative freon).

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Table-4: JERA's participation in External Initiatives and Endorsements
External Initiatives
Sustainable Development
Goals (SDGs)

JERA's Initiatives
Contribute to the achievement of the SDGs bypromoting business activities aimed at realising its
vision, "To scale up its clean energy platform of
renewables and low greenhouse gas thermal power,
sparking sustainable development in Asia and aroundthe world" (see Table-1).

Task Force on Climaterelated Financial
Disclosures (TCFD)JERA endorses the TCFD recommendations and will
use scenario analysis for identifying climate changerelated business opportunities and risks. JERA is alsoa member of the TCFD Consortium, which is
discussing how to disclose information on climatechange responses in line with the TCFD
recommendations.
JERA believes that the aims of the "GX League" areconsistent with JERA's challenge to achieve virtuallyzero CO2 emissions from our operations in Japan and

GX Leagueabroad by 2050, and will continue to officiallyparticipate in the "GX League" following its
endorsement of the "GX League Basic Concept" in
2022.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

iv. About the JERA Transition Finance Framework
In order to advance the initiatives toward CO2 zero emissions set forth in "JERA Zero
CO2 Emissions 2050", and in order to raise funds for transition activities contributing torealize the transition roadmap for the electricity sector of METI through Sustainablefinance, JERA formulated the JERA Sustainable Finance Framework (hereinafter,"Framework"). The criteria which this Framework specifically referred to is described in(3) of Section II below.

v.

Fundraiser s Transition Strategy for Decarbonization(1) Strategies by Sector (Industry) at the International/National/Regional Level
Figure-3 shows the transition roadmap for the electricity sector of METI.
The transition roadmap for the electricity sector of METI (see figure-3) and JERA's
Roadmap (see figure-2) are well aligned in terms of decarbonizing power sources andincreasing the efficiency of thermal power generation as a transition power source bydeveloping and introducing the latest technologies. The transition roadmap for theelectricity sector refers to the Sixth Strategic Energy Plan, which is in line with the Plans
for Global Warming Countermeasures. These are established based on Japanese
government's aim to achieve carbon neutrality in 2050 and to reduce greenhouse gas
emissions by 46% in 2030 compared to the FY2013 level in refer to IPCC 1.5°C Special
Report. These are consistent with the Paris Agreement.
JERA will shut down all inefficient coal-fired power plants by 2030, and promote thedemonstration of mixed combustion with ammonia at high-efficiency (ultra-supercritical)
coal-fired thermal power plants. In addition, JERA will replace the existing inefficient
LNG thermal power stations with high-efficiency stations, and carry out thedemonstration of mixed combustion with hydrogen. Through these approaches, JERA
will achieve reducing carbon emission intensity from thermal power plants by 20%
based on the long-term energy supply-demand outlook for FY 2030 as set by thegovernment. JERA also aim to reduce CO2 emissions from domestic operations by atleast 60% (relative to FY2013) by FY2035. Thus, it is considered that JERA's policy of
shutting down the inefficient coal power plants indicated in its roadmap, and its
reduction target of CO2 emission intensity by 2030 and CO2 emission reduction target
for 2035 are closely related to the pathway outlined in the transition roadmap for theelectricity sector of METI (Figure-3).

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Figure-3: "Transition Roadmap for Electricity Sector", February 2022, Ministry of Economy,
Trade and Industry (Provisional translation by DNV based on the Japanese version)

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion(2) Fundraiser's Transition Strategies
JERA has positioned its efforts to achieve its medium- and long-term goals, that aim atrealizing CO2 zero emission by 2050 set out in "JERA Zero CO2 Emissions 2050" and "JERA
Zero CO2 Emissions 2050 Roadmap for its Business in Japan", as its transition strategy.
These are consistent with the Transition Roadmap for the electricity sector.
Given the fact that indirect emissions from power generation accounts for 38% of the CO2
emissions per final energy consumption in Japan where JERA operates, the transition
strategy of JERA, whose major emissions come from its thermal power generation, will not
only contribute to reducing emissions from its own business activities (Scope 1 and 2), butalso contribute to achieving the decarbonization goals of diverse entities.
Table-5 below shows JERA's goal by 2050 and the medium-term goals, "JERA
Environmental Target 2030" and "JERA Environmental Target 2035". In addition, Figure-2
below (re-posted) shows the overview of JERA's transition strategy, specific initiatives andtimelines. The main initiatives for achieving carbon neutrality are shown in Table-5 below.
Table-5 JERA Transition Goals
 DECOMMISSION ALL INEFFICIENT COAL POWER PLANTS(SUPERCRITICAL OR LESS) AND CONDUCT DEMONSTRATION TESTSOF CONVERSION TO AMMONIA AT HIGH-EFFICIENCY (ULTRAJERAENVIRONMENTALTARGET 2030
MEDIUM-

SUPERCRITICAL) COAL POWER PLANTS
 PROMOTE THE DEVELOPMENT OF RENEWABLE ENERGY CENTERED ON
OFFSHORE WIND POWER PROJECTS AND WORK TO FURTHERIMPROVE THE EFFICIENCY OF LNG THERMAL POWER GENERATION REDUCE CARBON EMISSIONS INTENSITY OF THERMAL POWER PLANTS

TERM

BY 20% BASED ON THE LONG-TERM ENERGY SUPPLY-DEMANDGOALSOUTLOOK FOR FY2030 AS SET BY THE GOVERNMENT Reduce CO2 emissions from domestic operations relative to FY2013 by
JERA
Environmental
Target 2035

at least 60% by FY2035
 Strive to develop and adopt renewable energy in Japan, given expanded
adoption under the national government s 2050 carbon-neutral policy Commit to reduce carbon emissions intensity from thermal power
generation by promoting hydrogen and ammonia conversion

LONGTERM

2050

 CO2 zero emissions

GOALS*JERA's roadmap will be refined in stages based on policy and other assumptions. The roadmap will also be revised if theassumptions change significantly.

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Figure-2 (Re-posted): "JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan"
Figure-4 shows a timeline for the commercial operation of ammonia and hydrogen co-firing
rates in thermal power generation. Table-6 shows the major efforts to achieve carbon
neutrality.

Figure-4: Specific Initiatives for Decarbonization

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Table-6 JERA's Main Initiatives to Achieve Carbon Neutrality(Sustainable Finance Eligibility Criteria)
Project CategoryTransition Project
Projects for the realization of zero CO2emission thermal powerGreen Project
Renewable Energy

Eligibility Criteria
The expenditures related to demonstration
projects to substitute ammonia/hydrogen forfuels at thermal power plants
The expenditures related to decommissions ofinefficient thermal power plants, with the aim ofreplacement for high-efficiency thermal power
plants
The expenditures related to renewable energy(onshore/offshore wind, solar)

ICMA GBP: The expenditures related to battery storage*
Renewable energy (environmental
objectives: climate change mitigation)* Storage batteries may be classified as transition projects in addition to green projects, if they are foundto comply with the electricity roadmap, etc.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion(3) Governance of the Fundraiser (Sustainable Finance Promotion Structure)
JERA considers all matters related to transition finance as matters related to its
management strategy and implements the following corporate governance system. In
order to expand business throughout the world in a wide range of fields, the Board of
Directors consisting of directors from JERA who are familiar with JERA s business, andoutside directors who have extensive knowledge and experience shall make material
business decisions and supervise business executions. Further, JERA has corporate
auditors as independent officers (the "Corporate Auditors") who shall be responsible for
auditing the execution of the Directors duties. In addition, in order to separate thedecision-making and supervision of management from the execution of business and toeffectuate accurate and prompt decision-making and efficient business execution, JERA
has adopted an executive officer system where executive officers are responsible forbusiness execution based on the decisions made by the Board.

Figure-5 Corporate Governance Structure (Changed in July 2023)
Internal and external issues related to ESG, sustainability, and the SDGs are handled by the
Executive Committee and the "Sustainability Promotion Committee," chaired by the President
CEO and COO, under the supervision of the Board of Directors, to enhance the speed andeffectiveness of management decisions (Figure-6).

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Figure-6 ESG and Sustainability Management Structure

Name of Fundraiser: JERA Co., Inc.
Name of Framework: JERA Transition Finance Framework
Name of external reviewer: DNV Business Assurance Japan K.K.
Date of report: 22 Nov 2023

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II. Scope and Objectives
DNV has been commissioned by JERA to provide a pre-funding assessment on JERA
Sustainable Finance Framework (hereinafter, "Framework") and the Sustainable Finance.
Our objective is to implement an assessment on whether the JERA's Framework andSustainable Finance meet the criteria established on CTFH・CTFBG, GBP/ GBGLs・GLP/GLGLs
and SLBP/SLBGLs・SLLP/SLLGLs provide a second party opinion on the eligibility of the
Framework and the Sustainable Finance to be issued.
DNV, as an independent external reviewer, has identified no real or perceived conflict ofinterest associated with the delivery of this second-party opinion for JERA.
In this report, no assurance is provided regarding the financial performance of the Finance,
the value of any investments in the Finance, or the long-term environmental impacts of thetransaction.

Sustainable Finance with specific Use of Proceeds＊Below are listed based on GBP but replaced with loan-specific items as appropriate.

(1) Scope of Review*

The review assessed the following elements and confirmed their alignment with the gist of GBP:⊠

Use of Proceeds⊠

Process for Project Evaluation and Selection⊠

Management of Proceeds⊠

Reporting*The scope of review is to be applied as a part of the evaluation of the sustainable finance (Green or Transition)with use of proceeds*The four disclosure elements of CTFH and CTFBG are included in the scope of review(2) Role(s) of Review Provider (Specific Use of Proceeds)⊠

Second party opinion☐

Certification☐

Verification☐

Rating☐Other (please specify):

Sustainable Finance with General Corporate Purpose*Below are listed based on SLBP but replaced with loan-specific items as appropriate(1)At the launch of the bond/bonds at the time of loan execution/ the structure is⊠

A step-up structure⊠

A variable redemption structure*Any of the above or others (e.g. donations) is set individually based on the fundraiser's internal processes when
executing the finance.

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(2)Scope of Review

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

The review assessed the following elements and confirmed their alignment with the gist of SLBP/SLLP.
⊠

assessed all the following elements(complete review)☐

only some of them (partial review)⊠

Selection of KPIs⊠

Bond characteristics⊠

Calibration of SPTs⊠

Reporting⊠

Verification⊠and confirmed their alignment with
the SLBP/SLLP*The scope of review is to be applied as a part of the evaluation of the Sustainable finance (Transition) withgeneral corporate purpose.
*The four disclosure elements of CTFH and CTFBG are included in the scope of review.

(3) Role(s) of Review Provider⊠

Second Party Opinion☐

Certification☐

Verification☐

RatingStandards/Guidelines to be Applied
No.

Standards/guidelines

Scheme owner

1.

Climate Transition Finance Handbook (CTFH)*1

International Capital Market Association (ICMA), 2023

2.

Basic Guidelines on Climate Transition Finance Financial Services Agency, Ministry of Economy, Trade(CTFBG)*1
and Industry, Ministry of the Environment, 2021

3.

Green Bond Principles (GBP)*2*3

4.

Green Bond Guidelines and Sustainability-Link
Ministry of the Environment, 2022
Bond Guidelines (GBGLs/SLBGLs)*2*3

5.

Green Loan Principles (GLP) *2*3

6.

Green Loan Guidelines and Sustainability-Link
Ministry of the Environment, 2022
Loan Guidelines (GLGLs/SLLGLs)*2*3

7.

Sustainability-Link Bond Principles (SLBP)International Capital Market Association (ICMA), 2023

8.

Sustainability-Link Loan Principles (SLLP)*4

Loan Market Association (LMA) etc., 2023

*1
*2
*3
*4

International Capital Market Association (ICMA), 2021

Loan Market Association (LMA) etc., 2023

Climate transition: The concept of climate transition focuses principally on the credibility of a fundraiser s climatechange-related commitments and practices. (Quoted from CTFH and CTFBG)
It confirms compliance with the four core elements (use of proceeds, process for project evaluation and selection,
management of proceeds, and reporting) that must be met when implementing as a bond that meets the four elementsof transition and has a specific use of proceeds (quoted from CTFBG).
Green projects were assessed for eligibility using the referable technical criteria of the Climate Bond Initiative's Climate
Bond Standard.
Sustainability Linked Loan: A Sustainability Linked Loan is a loan that encourages borrowers to achieve ambitious
sustainability performance targets (SPTs) set by borrowers in advance, and are any type of loan product and/or
contingent facility (bonding loan facility, guaranteed loan facility, credit contingent facility (bonding loan facility,
guaranteed loan facility, letter of credit, etc.)) (Quoted from SLLP. The evaluation for SLBP is conducted synonymously.)
Note that SLLGLs is based on the idea that the SLLP (2023) requirements can be evaluated to encompass SLLGLs, so it
is not directly applicable but is used as a reference.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

III. Responsibilities of JERA and DNVJERA has provided the information and data used by DNV during the delivery of this review.
DNV s second party opinion represents an independent opinion and is intended to inform JERA
and other interested stakeholders of JERA s Sustainable Finance whether the established criteria
have been met, based on the information provided to us. In our work we have relied on theinformation and the facts presented to us by JERA. DNV is not responsible for any aspect of thenominated projects and assets referred to in this opinion and cannot be held liable if estimates,
findings, opinions, or conclusions are incorrect. Thus, DNV shall not be held liable if any of theinformation or data provided by JERA s management and used as a basis for this assessment
were not correct or completed.

IV. Basis of DNV s Opinion
To provide as much flexibility for the Fundraiser, JERA as possible, we have adapted our JERA
Sustainable Finance assessment methodologies, which incorporates the requirements of the CTFH・
CTFBG、GBP/ GBGLs・GLP/GLGLs and SLBP/SLBGLs・SLLP/SLLGLs, to create a JERA Sustainable
Finance Eligibility Assessment Protocol (hereinafter, "Protocol"). Please refer to Schedule-3 to 5.
The Protocol is applicable to the Sustainable Finance under the CTFH/CTFBG, GBP/ GBGLs・
GLP/GLGLs and SLBP/SLBGLs・SLLP/SLLGLs.
DNV, as an independent external reviewer, provides second party opinion according to theprotocol.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV s opinion. The
overarching principle behind the Sustainable Finance and Sustainable-Linked Finance as thebasis for the opinion are as follows:"enable capital-raising and investment for new and existing projects with environmental
benefits""provide an investment opportunity with transparent sustainability credentials""Climate Transition Finance is important (as climate transitions) through KPIs and SPTs,
quantitative, pre-determined, ambitious, and regularly monitored and externally validated andencourage the achievement of ESG (in terms of climate transitions) of fundraisers"

As per our Protocol, the criteria against which the Sustainable Finance has been reviewed aregrouped into common elements bellow, represented by CTFH・CTFBG、GBP/ GBGLs・GLP/GLGLs
and SLBP/SLBGLs・SLLP/SLLGLs.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion(1)

Four Elements of CTFH/CTFBG (disclosure elements)

Principle One: Fundraiser s Climate Transition Strategy and Governance
The financing purpose should be for enabling the Fundraiser s climate change strategy.
Principle Two: Business Model Environmental Materiality
The planned climate transition trajectory should be relevant to the environmentallymaterial parts of the Fundraiser s business model.
Principle Three: Climate transition strategy and targets to be science-based including
pathways
Fundraiser s climate strategy should reference science-based targets and transition
pathways.
Principle Four: Implementation Transparency
Market communication in connection with the offer of a financing instrument which has
the aim of funding the Fundraiser s climate transition strategy should also provide
transparency of the underlying investment program.

(2) Four elements of GBP/GBGLs・GLP/GLGLs
Principle One: Use of Proceeds
The Use of Proceeds criteria are guided by the requirement that the Fundraiser of agreen/transition finance must use the funds raised to bond eligible activities. The
eligible activities should produce clear environmental benefits.
Principle Two: Process for Project Evaluation and Selection
The Project Evaluation and Selection criteria are guided by the requirements that theFundraiser of a green/transition finance should outline the process it follows when
determining eligibility of an investment using green/transition finance, and outline any
impacts objectives it will consider.
Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that agreen/transition finance should be tracked within the issuing organization, that
separate portfolios should be created when necessary and that a declaration of howunallocated funds will be handled should be made.
Principle Four: Reporting
The Reporting criteria are guided by the recommendation that at least Sustainability
Reporting to the bond investors should be made of the use of bond proceeds and thatquantitative and/or qualitative performance indicators should be used, where feasible.
*The GLGLs set out requirements (internal reviews) for loan-specific elements. This is identified in thegreen loan requirements check.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion(3)

Five elements of SLBP/SLBGLs・SLLP/SLLGLs*1 ＊Please replace Sustainability withTransition in the context if necessary.

Principle One: Selection of Key Performance Indicator (KPIs)
The Fundraiser of a sustainability-linked finance should clearly communicate (to thelender) its overall sustainability objectives, as set out in its sustainability strategy, andhow these relate to its proposed SPTs. The KPI should be reliable, material to theFundraiser s core sustainability and business strategy, address relevant ESG challengesof the industry sector and be under management control.
Principle Two: Calibration of Sustainability Performance Targets (SPTs)
The SPTs should be ambitious, meaningful and realistic. The target setting should bedone in good faith and based on a sustainability improvement in relation to apredetermined performance target benchmark.
Principle Three: Finance characteristics
The finance will need to include a financial and/or structural impact depending onwhether the selected KPIs reach (or not) the predefined SPTs. The financedocumentation needs to require the definitions of the KPI(s) and SPT(s) and thepotential variation of the SLB s and SLL s financial and/or structural characteristics. Any
fallback mechanisms in case the SPTs cannot be calculated or observed in asatisfactory manner, should be explained.
Principle Four: Reporting
Fundraisers should publish and keep readily available and easily accessible up to date
information on the performance of the selected KPI(s), as well as a verification
assurance report (see Principle Five) outlining the performance against the SPTs andthe related impact and timing of such impact on the loan s financial and/or structuralcharacteristics, with such information to be provided to those institutions participatingin the finance or to investors participating in the finance at least once per annum.
Principle Five: Verification
The Fundraiser should have its performance against its SPTs independently verified by aqualified external reviewer with relevant expertise, at least once per annum. The
verification of the performance against the SPTs should be made publicly available.
*1: The Sustainability Linked Finance DNV Assessment Protocol consists of five requirements set basedon the SLLP (2021) and includes SLBGLs/SLLGLs (2022).

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V. Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by the Fundraiser in good faith. We
have not performed an audit or other tests to check the veracity of the information provided
to us. The work undertaken to form our opinion included:i. Pre-funding Assessment (Sustainable Finance Framework assessment)Creation of a JERA-specific Protocol, adapted to the purpose of the Sustainable
Finance, as described above and in Schedule-3 to this assessment.



Assessment of documentary evidence provided by JERA on the JERA Sustainable
Finance and supplemented assessment by a comprehensive desktop research. Thesechecks refer to current assessment best practice and standards methodologies.

Discussions with JERA, and review of relevant documentation.



Documentation of findings against each element of the criteria.

ii. Post-funding Assessment (*not included in this report)Interview with JERA management, and review of the relevant documentation.



Field research and inspection (if necessary).

Document creation of post-issuance assessment results.

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VI. Findings and DNV s Opinion
DNV s findings and opinion are as described in (1), (2) and (3) below.

CTF-1 to 4 in (1) below are the findings and opinions of DNV against the disclosure elementsof CTFH and CTFBG.
Please see Schedule-3 for details.
GBP/GLP-1 to 4 in (2) below are the findings and opinions of DNV against the requirement of
the four common elements of GBP/GBGLs ・GLP/GLGLs.
Please see Schedule-4 for details.
SLBP/SLBGLs・SLLP/SLLGLs-1 to 5 in (3) below are the findings and opinions of DNV against
the requirement of the five common elements of SLBP/SLBGLs・SLLP/SLLGLs in Transition
Linked Finance. *1
Please see Schedule-5 for details.
*1: Loans with potentially financial and structural changes linked to the achievement of future transition goals(1) Findings and Opinions of DNV against the Four Common Elements (Disclosure
Elements) of CTFH and CTFBG
CTF-1.

Fundraiser s Climate Transition Strategy and Governance-

JERA released "JERA Zero CO2 Emissions 2050", the goal of achieving zero CO2emissions by 2050, and "JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan" in October 2020. JERA has set a long-term goal of CO2 zero
emission by 2050, which is consistent with the goal of the Paris Agreement,
and also has set the medium-term goals "JERA Environmental Target 2030" toachieve its long-term goal. JERA disclosed its strategic plan to achieve the goalof transitioning to carbon neutrality in its roadmap.

-

In May 2022, JERA added a mid-term goal to accelerate further its efforts toachieve the realization of CO2 zero emissions, aiming to reduce CO2 emissions
from domestic operations by at least 60% (relative to FY 2013) by FY 2035
with the establishment of the "JERA Environmental Target 2035" and the
update of the "JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan". Furthermore, JERA has developed a more ambitious transition
strategy, including clarifying the timing of full-scale operation at 20% and 50%
ammonia co-firing rates in thermal power generation, consistent with thetransition roadmap for the electricity sector of METI.

-

Based on the plan for initiatives towards realization of zero-CO2 emissions in
2050 as a science-based long-term target quantified by JERA, DNV has
reviewed and confirmed that JERA's targets correspond to achieving the goalsof the Paris Agreement. JERA sets corporate environmental strategies that are

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

important to its business model based on the identification of risks andopportunities and scenario analysis referred to TCFD guidance.
-

Specifically, JERA's Transition Strategy and medium- to long-term goals are
consistent with the transition roadmap and scientifically based. In addition, an
activity plan utilizing the TCFD guidance has been incorporated and an
investment plan has been developed. Moreover, the main measures to achieve
continuous emission reductions in the future are disclosed and will be reviewed
from time to time based on the development progress of each technology andin accordance with the timeline.

-

JERA recognizes that response to climate change, including theimplementation of Transition Strategy, is one of the most significant issues of
its business, and has established system and Framework to promote theinitiatives specified in "JERA Zero CO2 Emissions 2050" and "JERA Zero CO2Emissions 2050 Roadmap for its Business in Japan" at the management level.

-

As a global company that provide energy solutions not only in Japan, but also
around the world, JERA considers global warming countermeasures as its
highest-priority management issue. Given that there are many countries in theworld experiencing such remarkable growth that the supply of power is unable
to keep up while there are also many areas that remain non-electrified and are
in need of power generation facilities, JERA's mission is not only to provide
optimal, environmentally conscious power solutions to these countries andregions, but also to create jobs via the power facility construction process aswell as to cultivate human resources through the provision of technology andexpertise. In turn, these will serve as springboards for further growth anddevelopment of industries, communities, and societies. Through these
activities, JERA aims to broadly contribute to achieving the Sustainable
Development Goals (SDGs) set by the United Nations. Among the materiality
issues identified in the JERA Group Integrated report 2023", sustainablefinance mainly relates to "3. Adopt and Expand Renewable Energies" and "4.
Decabonization of Thermal Power and Fuel Supply Chains".

-

DNV has confirmed that the implementation plan provided by JERA, which isestablished based on the Framework, "JERA Zero CO2 Emissions 2050" and"JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan", is wellaligned with JERA's Transition Strategy. Through the assessment, DNV has
also confirmed that the implementation plan established based on its
Transition Strategy is reliable, ambitious and achievable.

CTF-2.
-

Business Model Environmental Materiality
Given the fact that indirect emissions from power generation accounts for 38%
of the CO2 emissions per final energy consumption in Japan where JERA
operates, the transition strategy of JERA, whose major emissions come fromits thermal power generation, will not only contribute to reducing emissions
from its own business activities (Scope 1 and 2), but also contribute toPage 33 of 79

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

achieving the decarbonization goals of diverse entities. In other words, JERA's
approach towards transition aiming to achieve decarbonization at a lower costand higher speed while maintaining stable energy supply, will directly support
its own transition as well as the transition of society as a whole.
-

JERA's roadmap is aligned with the transition roadmap for the electricity sectorof METI.

-

DNV confirmed that JERA's plan to implement its Transition Strategy is one of
the activities of JERA's core business and is closely linked to the activities that
contribute to the CO₂ reduction of the society as a whole, thus will contributeto the overall environment. JERA's Transition Strategy is associated with themateriality that JERA has identified by facilitating GRI standards*1, ISO26000,
SASB standards*2, etc., and will contribute to generate significant positiveenvironmental impacts both qualitatively and quantitatively. Environmental
materiality includes activities that contribute to transitions such as "Adopt andExpand Renewable Energies" and "Decabonization of Thermal Power and FuelSupply Chains". The report also discloses Scope 1 through 3 in Japan, which
are the results of activities.
*1: An international standard providing ESG-related reporting, management and analysis methods
established by Global Reporting Initiative.
*2: A disclosure standard on ESG factors that are expected to have a high financial impact in the
future developed by the Sustainable Accounting Standards Board.

CTF-3.

Climate transition strategy to be science-based including targets andpathways-

JERA has set a transition plan consistent with the Paris Agreement, which isscience-based, and a transition trajectory consistent with the transition
roadmap for the electricity sector of METI. The transition roadmap for theelectricity sector refers to the Sixth Strategic Energy Plan, which is in line with
the Plans for Global Warming Countermeasures. These are established basedon Japanese government's aim to achieve carbon neutrality in 2050 and to
reduce greenhouse gas emissions by 46% in 2030 compared to the FY2013
level referring to IPCC 1.5°C Special Report. These plans are consistent with
the Paris Agreement.
DNV has confirmed that JERA's Transition Strategy quantified emission
intensity, absolute value and ratio based on a consistent methodology withprescribed assumptions. Specifically, JERA sets out the following transition
targets in its roadmap.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Table-5 (reposted) JERA Transition Goals

JERA
ENVIRONMENTALTARGET 2030
Mediumterm goals

JERA
Environmental
Target 2035

Long-

2050

term goals

 DECOMMISSION ALL INEFFICIENT COAL POWER PLANTS(SUPERCRITICAL OR LESS) AND CONDUCT DEMONSTRATION TESTSOF CONVERSION TO AMMONIA AT HIGH-EFFICIENCY (ULTRASUPERCRITICAL) COAL POWER PLANTS
 PROMOTE THE DEVELOPMENT OF RENEWABLE ENERGY CENTEREDON OFFSHORE WIND POWER PROJECTS AND WORK TO FURTHERIMPROVE THE EFFICIENCY OF LNG THERMAL POWER GENERATION REDUCE CARBON EMISSIONS INTENSITY OF THERMAL POWER
PLANTS BY 20% BASED ON THE LONG-TERM ENERGY SUPPLYDEMAND OUTLOOK FOR FY2030 AS SET BY THE GOVERNMENT Reduce CO2 emissions from domestic operations relative to FY2013
by at least 60% by FY2035
 Strive to develop and adopt renewable energy in Japan, given
expanded adoption under the national government s 2050 carbonneutral policy Commit to reduce carbon emissions intensity from thermal power
generation by promoting hydrogen and ammonia conversion
 CO2 zero emissions

JERA's roadmap will be refined in stages based on policies and other assumptions. The roadmap will also be revised if theassumptions change significantly.

-

CTF-4.

JERA's Transition Strategy clarifies the process for achieving the goals,
including the use of future CO2 capture technologies. It also shows therelevant categories of Scope 3. Note that the use of carbon credits has notbeen decided at this time.
Implementation Transparency-

DNV confirmed that JERA's investment and project plans related to theTransition strategy include an overview of the investments made to date andfuture investments, agreements on expenditures, and their outcomes andimpacts. The plan includes investments of around 650 billion yen in green
projects, mostly renewable energy and related to decarbonization, as well as
the phase-out of projects that do not conform to the Transition. DNV also
confirmed that the overall investment plan (investment amount) will be
executed in accordance with the timeline. DNV confirmed that in order toensure transparency, JERA will discuss on the disclosure, wherever possible, of
its basic investment plan (investment amount). Please note that, at this time,internal carbon prices are not taken into account in the initiative.

-

DNV also reviewed the Framework and the ESG management of JERA andconfirmed high transparency in the implementation. JERA explained theappropriateness of its execution to DNV and DNV agreed on theappropriateness.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion(2) Findings and Opinions of DNV against the Four Common Elements of GBP/GBGLs・
GLP/GLGLs*The four elements are criteria of sustainable finance in the format of use of proceeds instrument, andgreen bonds stated below can be read as transition finance (bond) partially.

GBP/GLP-1. Use of Proceeds
JERA has defined the eligibility criteria as transition projects and green projects thataligned with its Transition Strategy and related handbooks, principles and guidelines(CTF-H and CTF-BG). Table-6 (Re-posted) shows the eligibility criteria of JERA's
Sustainable Finance and the overview of the projects.
Table-6 (reposted) JERA's Main Initiatives to Achieve Carbon Neutrality(Sustainable Finance Eligibility Criteria)
Project Category
Transition Project
Projects for the realization of zero CO2emission thermal power

Green Project
Renewable Energy
ICMA GBP:
Renewable energy (environmental
objectives: climate change mitigation)








Eligibility Criteria
The expenditures related to demonstration
projects to substitute ammonia/hydrogen forfuels at thermal power plants
The expenditures related to decommissions ofinefficient thermal power plants, with the aim ofreplacement for high-efficiency thermal power
plants
The expenditures related to renewable energy(onshore/offshore wind, solar)
The expenditures related to battery storage** Storage batteries may be classified as transition projects in addition to green projects, if they are foundto comply with the electricity roadmap, etc.

DNV has confirmed that JERA plans to allocate the net proceeds from Sustainable
Finance to financing and refinancing R&D, capital/facilities investments, operations andrenovations, investments, and other related expenditures of eligible projects that in linewith JERA's investment plans for implementation of its transition strategy.
These projects are representative projects exemplified by CTFH・CTFBG、GBP/ GBGLs・
GLP/GLGLs and SLBP/SLBGLs・SLLP/SLLGLs that contribute to business transformation.
These projects also directly or indirectly support the decommissioning of inefficient coalfired thermal power, the shift to LNG/ammonia/hydrogen co-firing, and theimplementation of renewable energy. Moreover, they contribute to the achievement of
the transition roadmap for electricity sector of METI. These projects are regarded ashaving clear and positive environmental impacts in line with JERA's Transition Strategy,
and are expected to contribute to the SDGs. The projects are aligned with GBP-1.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

GBP/GLP-2. Process for Project Evaluation and Selection
JERA will confirm that the transition projects and green projects contribute to theachievement of its Transition Strategy. In addition, JERA also confirms the following
contents (< Exclusion Criteria>) included in the Framework. Specifically, JERA's Global
Finance Group will select nominated Eligible Projects as specified in the eligibility
criteria and the related business departments will analyze and review the financial
risks, technical and operational risks, market environment and ESG risks
comprehensively. After that, Head of the Global Finance Group will make the final
decition. The process had been established and will be executed in line with thenormal operation of JERA. DNV confirmed that that the plan will be implemented inaccordance with the appropriate process.

< Exclusion Criteria>-

Unfair transactions that do not comply with the laws and regulations of the country,
such as bribery, corruption, blackmail, embezzlement, etc-

Transactions that can cause social problems related to human rights and theenvironment

Evaluation and selection:⊠

Conforms to the issuer s achievement of⊠environmental contribution goals⊠

Documented process to determine thatprojects fit within defined categories

The project is eligible for use of⊠proceeds by green bond andDocumented process to identify and manage
potential ESG risks associated with the projecttransparency is ensured.
⊠The project is evaluated and selected☐

Other (please specify):

based on the published standard
summary

Information on Responsibilities and Accountability:⊠

Evaluation / Selection criteria subject to⊠external advice or verification☐

Other (please specify):

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In-house assessment

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

GBP/GLP-3. Management of Proceeds
The proceeds will be deposited into JERA s common account, and JERA's Global
Finance Group will manage the allocation for each project using the accounting
manual, accounting system and proceeds management forms for sustainable finance.
The usage of accounting manual and accounting system as well as other applicablesystems enables JERA's Global Finance Group to trace the proceeds over theredemption or repayment period. JERA's Global Finance Group will review the
allocation status at least once a year, based on the proceeds management forms forsustainable finance. Vouchers related to the management of the proceeds will be kept
in accordance with accounting manual.
Such allocation to the Eligible Projects will be made within three years from theissuance. If the proceeds are to be used for refinancing existing expenditures, thelook-back period is three years from the time of the financing, and the proceeds willbe allocated to the eligible transition projects and green projects in accordance withthe process set out in GBP-2.
The unallocated proceeds will be managed in cash or cash equivalents until theproceeds have been fully allocated.
Prior to any sustainable finance executed under this Framework in the future, themanagement of proceeds will be disclosed in legal documents.

Tracking of Proceeds:⊠

Some or all of the proceeds by green bonds that are planned to be allocated aresystematically distinguished or tracked by the issuer.

☐

Disclosure of intended types of temporary investment instruments for unallocated proceeds⊠

Other (please specify): Unallocated proceeds are managed in cash or cash equivalents

Additional Disclosure:☐

Allocations to future investments only☐

Allocations to both existing and future
investments⊠

Allocation to individual disbursements☐

Allocation to a portfolio of disbursements☐

Disclosure of portfolio balance of☐

Other (please specify):

unallocated proceeds

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

GBP/GLP-4. Reporting
DNV confirmed that the Fundraiser will report on sustainable finance (annually) until theproceeds are allocated, and will disclose the allocation status. As for the positiveenvironmental impacts, DNV confirmed that JERA plans to report on the overview andprogress of eligible projects been allocated at least until the proceeds of sustainablefinance are fully allocated.
DNV confirmed that even after the allocation plan or the allocation itself is completed,
JERA will disclose information through reports on a timely basis or in the event of any
significant change in transition strategy and pathway, the allocation plan andimplementation status of projects.
Reports will be disclosed on the Fundraiser s website.

<Allocation Status>
Eligibility Criteria been allocated and the aggregated amount of proceeds
allocated to the Eligible Projects at Eligibility Criteria level.

The amount of unallocated proceeds and management methods.



The amount of proceeds used for refinancing.

<Environmental Benefits>Positive environmental impacts are disclosed as overviews of the projects(including progress, completion, operation, etc.) within the scope ofconfidentiality, to the extent practicable, and in consideration of thecharacteristics of the project.

For renewable energy, the types of "installed capacity (MW)," "annual power
generation (MWh)," and "annual CO2 emission reduction amount" are also
disclosed.

<Others>

Efforts to achieve zero CO2 emissions by 2050 will be reviewed in a timely
manner based on policies, technological trends, etc. and disclosed whenevernecessary.

Table-7 shows a reporting plan for the environmental benefits of projects that use
proceeds from Sustainable Finance.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Table-7 Reporting content of environmental benefits
Project Category
Transition Project
Projects for therealization of zero CO2emission thermal
powerGreen Project
Renewable energy

Eligibility Criteria
 The expenditures related todemonstration projects tosubstitute ammonia/hydrogenfuels at thermal power plants
 The expenditures related todecommissions of inefficient
thermal power plants, with theaim of replacement for highefficiency thermal power plants
 The expenditures related torenewable energy(onshore/offshore wind, solar)

Reporting Items
 The outline and the progress of theeligible project The outline and the progress of theeligible project

Reporting the following Metric byrenewable energy type
 Installed capacity (MW)ICMA GBP:
 Annual power generation (MWh)Renewable energy
 Annual CO2 emission reductions(environmental
 The expenditures related to The outline and the progress of theobjectives: climate
battery storage*
eligible projectchange mitigation)
 Installed capacity (MWh)* Storage batteries may be classified as transition projects in addition to green projects, if they arefound to comply with the electricity roadmap, etc.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Use of Proceeds Reporting:☐

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)⊠Other (please specify): Eligible Criteria basis☐

GB refinanced share of total investment

Information Reported:⊠

Allocated amounts☐

Other (please specify):

Frequency:⊠

Annual☐Other (please specify):☐

Semi-annual

Impact Reporting (Environmental Benefits):⊠

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

Frequency:⊠

Annual☐Other (please specify):☐

Semi-annual☐

Energy savings

Information Reported (Expected or Ex-post):☐

GHG Emissions / Savings⊠

Other ESG indicators (please
specify): Overview project andprogress status of project

Means of Disclosure:☐

Information published in financial☐

report (Integrated Report)☐

Information published in ad hoc
documents☐

Information published in sustainability
report⊠Other (please specify): disclosed on
websiteReporting reviewed (if yes, please specify which parts of the reporting are subject toexternal review)

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion(3) Findings and Opinions of DNV against the Five elements of SLBP/SLLP
SLBP/SLLP-1

Selection of Key Performance Indicator (KPIs)-

DNV reviewed JERA's KPIs related to sustainable finance and confirmed that the
selected KPIs are relevant and important to JERA's core transition strategy andsustainability management. The selected KPIs are detailed in Schedule-2.

-

The CO2 emissions intensity of JERA's domestic power generation business is an
important indicator for JERA's transition strategy and sustainability management,
and is a transparent KPI that can be measured and evaluated on an annual basis.
The KPI will contribute to both transition strategy and sustainability management
to realize "JERA Zero CO2 Emissions 2050".

-

DNV confirmed that the KPIs selected by JERA are consistent with the "Sixth Basic
Energy Plan" of the Agency for Natural Resources and Energy and the "Transition
Roadmap for the Electricity Sector" of METI, and that the KPIs are appropriately
set as comparable indicators-

The GHG emissions required for the evaluation of KPIs are in accordance with the
GHG Protocol, a global standard, and are calculated based on the "Manual for
Calculating and Reporting Greenhouse Gas Emissions" under the "Act on
Promotion of Global Warming Countermeasures", which is externally verifiable
and can be benchmarked against external references. DNV concluded that the
Scope 1 CO2 emissions intensity of the JERA Group's domestic power generation
operations is a robust and reliable indicator.

List of selected KPIs
List of selected KPIs
 KPI：CO2 emissions intensity of Scope 1 in the JERA Group's domestic power generation
businessDefinition, Scope and Parameters:⊠

Clear definition of each selected KPIs

☐

Other

⊠

Clear calculation methodology

Relevance, robustness, and reliability of the selected KPIs:⊠

Credentials that the selected KPIs are⊠

Evidence that the KPIs are externally verifiable⊠

Evidence that the KPIs can be benchmarked

relevant, core and material to the Issuer ssustainability and business strategy.
⊠

Credentials that the KPIs are measurable orquantifiable on a consistent methodological
basis

☐

Other

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-2

Calibration of Sustainability Performance Targets (SPTs):-

JERA, as the largest power generation company in Japan, recognizes that it is in aposition to actively lead the realization of a decarbonized society in Japan, andhas set forth "JERA Zero CO2 Emissions 2050" and "JERA Zero CO2 Emissions
2050 Roadmap for its Business in Japan" to clarify its long-term vision. In
addition, as a target to be achieved by FY2030, JERA has announced in the "JERA
Environmental Target 2030" a "Reduce carbon emission intensity of thermal
power plants by 20% based on the long-term energy supply-demand outlook for
FY 2030 as set by the government."-

This target is set as the SPT in JERA's sustainable finance, and is consistent withthe "Sixth Basic Energy Plan" of the Agency for Natural Resources and Energy andthe "Transition Roadmap for the Electricity Sector" of METI, as well as being an
ambitious SPT as the largest power producer in Japan. Achieving this SPT ismeaningful to JERA's business as it relates to reducing GHG emissions, asustainability challenge faced by power generators.

-

On the other hand, in the SPT setting, the SPT is set at a value of 0.477 kg- CO2/kWh or less after a further 20% reduction from the estimated national emissions
intensity from thermal power generation, based on the estimated value of CO2
emissions from electricity-derived energy, total electricity generation, and theratio of thermal power generation in the "2030 Outlook for Energy Supply and
Demand" released by the Japanese government in October 2021.

-

SPT estimates assume steady progress in decarbonizing technologies, economic
rationality, and policy consistency. JERA, as the largest power generationcompany in Japan, has made various calculations and studies on how to achieve
zero emissions from thermal power generation (reduction of emission intensity,
which is the SPT for this project, and reduction of CO2 emissions from domestic
operations by at least 60% by FY 2035, which is separately specified) while
fulfilling its responsibility for stable energy supply, and JERA has set the SPT as anambitious goal required for transition-linked finance, and as a feasible goal thatcan be guaranteed with probability.

-

DNV confirmed that this SPT is related to KPI improvement. In order to achieve
zero emissions by 2050, JERA aims to reduce CO2 emissions from domestic
operations by at least 60% relative to FY 2013 level by FY 2035, and by 20%
from the emissions intensity of thermal power generation for the country as awhole, based on the long-term energy supply and demand outlook for FY2030 set
by the government, a goal that goes beyond "business as usual."-

DNV confirmed that the SPT goal-setting process was based on an appropriate
combination of multiple benchmarking approaches.
The eligibility criteria defined by JERA in the framework include "The
expenditures related to decommissions of inefficient thermal power plants,
with the aim of replacement for high-efficiency thermal power plants" andPage 43 of 79

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion"The expenditures related to demonstration projects of fossil fuels andammonia/hydrogen co-firing." They are also recognized as Best Available
Technology or other technologies that come close in the "Sixth Basic Energy
Plan" of the Agency for Natural Resources and Energy and the "Transition
Roadmap for the Electricity Sector" of METI.
-DNV confirmed that SPT target setting was properly disclosed.
-

Through the Framework and the JERA Zero CO2 Emissions 2050 Roadmap, it
explains how GHG emission reductions will be achieved.

DNV confirmed that SPTs will not be set annually in consideration of responding
to electricity supply and demand, etc., but that their progress will be verified
annually by an external organization.
Table-II(reposted) JERA Transition Linked Finance KPIs and SPTs

KPIs

Scope 1 CO2 emissions intensity in JERA Group's domestic power generation
business

CO2 emissions intensity (Scope 1) in the JERA Group's（*1）domestic power generation
Definition
of KPI

business in the relevant fiscal year（*2）(*1) Equivalent to JERA s investment ratio in JERA Group Companies and Joint Thermal PowerBusiness(*2) Calculated on a sending-end power basis

SPTs

Definitionof SPTJERA Group s domestic emissions intensity in FY2030 to be 0.477 kg- CO2/kWh or
less
The SPT is set at a value of 0.477 kg- CO2/kWh or less after a further 20% reduction fromthe estimated national emissions intensity from thermal power generation, based on theestimated value of CO2 emissions from electricity-derived energy, total electricity
generation, and the ratio of thermal power generation in the "2030 Outlook for Energy
Supply and Demand" released by the Japanese government in October 2021.

(SPTs) Rationale and level of ambition:⊠

Evidence that the SPTs represent a⊠material improvement⊠

selected benchmarks and baselines

Evidence that SPTs are consistent with theIssuer s sustainability and business strategy☐

Credentials on the relevance and reliability of⊠Credentials that the SPTs are determined on apredefined timeline

Other

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Benchmarking approach:⊠⊠

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Issuer own performance☐Issuer s peers

Reference to the science

☐

Other

⊠

Issuer s strategy to achieve description

☐

Other

Additional disclosure:⊠potential recalculations or adjustments
description⊠

identification of key factors that may affectthe achievement of the SPTs

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-3

Bond/Loan Characteristics

The transition financing, which is general corporate purpose, (bonds or loans)
executed under the Framework will have financial and structural characteristics
that will change depending on the achievement of the SPT. It was confirmed that
JERA has internal procedures to ensure that each time a financing is executed,
the trigger event and its scope of impact with specific SPT measurement timing
and performance requirements will be linked to target achievement and financial
incentives, and details including conditions will be disclosed in the bond disclosure
documents or loan agreement documents.
DNV confirmed that JERA has reviewed the appropriate fallback mechanisms(preliminary alternatives) and, as a result, has decided not to establish alternative
SPTs or calculation methods at this time because the risks that cannot becalculated or observed are very small.
-

It was confirmed that JERA intends to disclose an explanation of the changes inthe event of unforeseen events (such as significant changes in regulatory or othersystems or the occurrence of unusual events) that may materially affect themeasurement method and scope of KPIs, the setting of SPTs, and assumptions
due to circumstances unforeseeable at the time of the execution of transition
financing (general corporate purpose), either in the disclosure documents for thebonds or the loan agreement.

-

In addition, if there is a reasonable reason for the SPT to be temporarily notachieved due to transient changes in the domestic electricity supply, changes in
the characteristics of bonds and loans may be postponed.

Financial impact:⊠

variation of the coupon⊠

Other: Changes in financial and structural characteristics

Structural characteristic:⊠

Other: terms and conditions of trigger judgement (judgement date and SPT) will be set by theperiod of an individual bond or loan, etc., and clarified in a legal disclosure documentation (orother disclosure method to the public) or an agreement document.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-4-

Reporting

DNV has confirmed that the required information will be made available to the
public in a timely manner for the following details required by the SLBP/SLLP

KPI performance against SPT: After the execution of the Transition Linked
Finance and until the final determination date, JERA will obtain verificationfrom an external institution at least once a year, and disclose this information
on its website.



SPT achievement status: Subject to annual verification by an independent
third party to determine financial and structural characteristics.

When SPT changes are required：JERA will discuss with the parties concerned
the establishment of SPTs with a level of ambition equal to or greater thanthe existing evaluation standards based on the changes, and will obtainsecond-party opinions from third-party evaluation organizations as necessary.

Information reported:⊠

performance of the selected KPIs⊠

verification assurance report (second party

level of ambition of the SPTs☐

Other：☐

Semi-annual

opinion)⊠Frequency:⊠

Annual☐Other

Means of Disclosure:☐

Information published in financial report⊠

Information published in sustainability report☐

Information published in ad hoc⊠

Other (please specify): disclosed on issuer s
website☐Reasonable assurance

documents☐

Reporting reviewed

Level of Assurance on Reporting:⊠

Limited assurance

☐

Other

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-5-

Verification:

DNV has confirmed that JERA plans to undergo independent verification of thedata related to the KPIs at least once a year by a qualified external evaluationbody with relevant expertise in SPT triggering events.

Information reported:⊠

Limited assurance☐

Reasonable assurance

☐

Other

☐

Semi-annual⊠

KPI methodology

Frequency:⊠

Annual☐Other

Material change:⊠

Perimeter⊠

SPTs calibration

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

VII. Assessment Conclusion
On the basis of the information provided by JERA and the work undertaken, it is DNV s
opinion that the JERA Sustainable Finance Framework and Sustainable Financeexecuted by JERA meets the criteria established in the Protocol, and that it is alignedwith the following stated definition or purpose of bonds and loans thatspecify/unspecify the use of proceeds, within the CTFH・CTFBG、GBP/ GBGLs・
GLP/GLGLs and SLBP/SLBGLs・SLLP/SLLGLs.
-"enable capital-raising and investment for new and existing projects withenvironmental benefits"-"provide an investment opportunity with transparent sustainability credentials"-"Climate Transition Finance is important (as climate transitions) through KPIs and
SPTs, quantitative, pre-determined, ambitious, and regularly monitored andexternally validated and encourage the achievement of ESG (in terms of climatetransitions) of fundraisers"

DNV Business Assurance Japan K.K.
22 Nov 2023

Thomas Leonard

Naoki Maeda

Head of Section, Sustainability Services

Managing Director

SUpply Chain & Product Assurance

DNV Business Assurance Japan K.K.

DNV Australia, New Zealand and Southeast Asia

Masato Kanedome

Yasuaki Miyamoto

Project Manager

Team Leader

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion
About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advance thesafety and sustainability of their business. Combining leading technical and operational expertise, risk methodology andin-depth industry knowledge, we empower our customers decisions and actions with trust and confidence. We
continuously invest in research and collaborative innovation to provide customers and society with operational andtechnological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.

Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV: The management ofIssuer has provided the information and data used by DNV during the delivery of this review. Our statement represents
an independent opinion and is intended to inform the Issuer management and other interested stakeholders in the Bond
as to whether the established criteria have been met, based on the information provided to us. In our work we haverelied on the information and the facts presented to us by the Issuer. DNV is not responsible for any aspect of thenominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Issuer s management andused as a basis for this assessment were not correct or complete.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Schedule-1 JERA Sustainable Finance Nominated Eligible Projects
The projects listed in the table are Sustainable finance candidates that have been evaluated for eligibility at the time of pre-issue eligibility assessment (as ofAugust 2022).
In the future, Finance executed under the JERA Sustainable Finance Framework will be selected from one or more of the eligible project candidates anddisclosed before financing in the legal documents or reported in post-financing reports.
If additional transition projects and green projects are included, eligibility will be evaluated in advance by JERA in accordance with the JERA Sustainable
Finance Framework and, if necessary, DNV will evaluate them in a timely manner.

Project Category

Eligibility Criteria

Alignment with the SDGs

 The expenditures related to demonstration projects to substituteTransition project
Projects for the realization of zeroCO2 emission thermal powerammonia/hydrogen for fuels at thermal power plants
 The expenditures related to decommissions of inefficient thermal
power plants, with the aim of replacement for high-efficiency
thermal power plants

Green project
Renewable energy The expenditures related to renewable energy (onshore/offshorewind, solar)

ICMA GBP:
Renewable energy The expenditures related to battery storage*(environmental objectives: climatechange mitigation)
Green finance: only green projects can use the proceeds.
Transition finance: the proceeds are used for either or both transition and green projects.
* Storage batteries may be classified as transition projects in addition to green projects, if they are found to comply with the electricity
roadmap, etc.

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Schedule-2 Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs)
KPIs Key Performance Indicators
KPI

Scope 1 CO2 emissions intensity in JERAGroup's domestic power generation
business

Overview
CO2 emissions intensity (Scope 1) (*2) from domestic power generation business of the
JERA Group (*1) in the fiscal year was selected as KPI for Sustainable Finance, which isGeneral Corporate Purpose, executed in accordance with the framework.
*1

Equivalent to JERA s investment ratio in JERA Group Companies and Joint Thermal
Power Business*2
Calculated on a sending-end power basis

SPTs Sustainability Performance Targets
SPT

JERA Group s domestic emissions intensity
in FY2030 to be 0.477 kg- CO2/kWh or less

Overview
This SPT will be used for Sustainable Finance, which is General Corporate Purpose,
executed in accordance with the Framework.
The SPT is set at a value of 0.477 kg- CO2/kWh or less after a further 20% reduction
from the estimated national CO2 emissions intensity from thermal power generation,
based on the estimated national CO2 emissions from energy-derived electricity, the total
amount of electricity generated, and the power source composition ratio of thermal
power generation, as stated in the "Energy Supply and Demand Outlook for FY2030"
released by the Japanese government in October 2021.
Specific trigger criteria for individual transition-linked finance will be set by anappropriate method around the SPT and disclosed prior to the execution of the financing
in the bond disclosure documents or loan agreement documents.

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Schedule-3 Sustainable Finance Framework Eligibility Assessment Protocol
The checklists (1-4) below are DNV evaluation procedures created for JERA Sustainable Finance Framework and Transition Finance (specific use of proceeds andgeneral corporate purpose) Eligibility Evaluation based on the disclosure requirements of CTFH. The "confirmed documents" in the Work Undertaken include public or
private documents (internal documents of the issuer or fundraiser), etc., and are provided by JERA as evidence of eligibility judgment for DNV. *Please replace"Issuer", "Investor" to "Borrower/Fundraiser", "Lender" in the context in the following requirements.

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1

Issuer s Climate
Transition
Strategy andGovernance

The green, sustainability or

Confirmed documents:- Framework- JERA Zero CO2Emissions 2050
- JERA Zero CO2Emissions 2050
Roadmap for its
Business in Japan- JERA Environmental
Target 2030

JERA has established a framework and has introduced various plans
and initiatives to manage and enhance the organization's
environmental sustainability and related performance against JERA's
broad environmental strategy.

sustainability-linked financing should
be directed toward enabling an
issuer s GHG emissions reduction
strategy in alignment with the goalsof the Paris Agreement.
Recommended information andindicators:• a long-term, science-based target toalign with the goals of the Paris
Agreement;• relevant and credible interim sciencebased targets in the short and mediumterm on the trajectory towards the longterm goal, in line with the relevant
regional, sector, or international climatechange scenarios;• disclosure on an issuer s transition planor climate transition strategy. Thisshould include specific itemisation of themain levers towards GHG emissions
reduction, such as a detailed capital
expenditure (CapEx) plan and relevant
technological implications (i.e., amounts
to be spent, what carbon cost is
considered for implementing such CapEx- JERA Environmental
Target 2035
- JERA Group Integrated
Report 2023
- METI, "Transition
roadmap for theelectricity sector"
Interviews withstakeholders

Based on the science-based long-term targets quantified by JERA,DNV has reviewed and confirmed that JERA's targets correspond toachieving the goals of the Paris Agreement. JERA sets corporate
environmental strategies that are important to its business model
based on the identification of risks and opportunities and scenario
analysis referred to TCFD guidance.
JERA released "JERA Zero CO2 Emissions 2050", the goal of achieving
zero CO2 emissions by 2050, and "JERA Zero CO2 Emissions 2050
Roadmap for its Business in Japan" in October 2020. JERA has set along-term goal of CO2 zero emission by 2050, which is consistent withthe goal of the Paris Agreement, and also has set the medium-termgoals "JERA Environmental Target 2030" to achieve its long-termgoal. JERA disclosed its strategic plan to achieve the goal oftransitioning to carbon neutrality in its roadmap and the "JERA
Environmental Target 2030."
In May 2022, JERA added a target to accelerate further its efforts toachieve the realization of CO2 zero emissions, aiming to reduce CO2
emissions from domestic operations by at least 60% (relative toFY2013) by FY 2035 with the establishment of the "JERA

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Ref.

Criteria

Requirements

Work Undertaken

programme, operational impacts,
regulatory considerations, etc.);• clear oversight and governance of anissuer s climate transition strategy,
including management/board levelaccountability; and• evidence of a broader sustainability
strategy to mitigate relevant
environmental and social externalities,
including just transition considerations
where appropriate, and contributions to
the UN Sustainable Development Goals(UN SDGs).

DNV Findings
Environmental Target 2035" and the update of the "JERA Zero CO2Emissions 2050 Roadmap for its Business in Japan". Furthermore,
JERA have developed a more ambitious transition strategy including
clarifying the timing of full-scale operation at 20% and 50% ammonia
co-firing rates in coal-fired thermal power generation, which isconsistent with the transition roadmap for the electricity sector of
METI.
Specifically, JERA's Transition Strategy is consistent with the transition
roadmap for the electricity sector of METI and is incorporated with its
activity plan which referred to the TCFD guidance. In addition, inorder to achieve continuous emission reductions in the future, JERA
plans to review its efforts in a timely and appropriate manner,considering the development status of the corresponding technology
and the timeline.
JERA recognizes that response to climate change, including theimplementation of Transition Strategy, is one of the most significant
issues of its business, and has established system and Framework topromote the initiatives specified in "JERA Zero CO2 Emissions 2050"
and "JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan", "JERA Environmental Target 2030" and "JERA Environmental
Target 2035" at the management level.
As a global company that provide energy solutions not only in Japan,
but also around the world, JERA considers global warming
countermeasures as its highest-priority management issue. Given that
there are many countries in the world experiencing such remarkable
growth that the supply of power is unable to keep up while there arealso many areas that remain non-electrified and are in need of power
generation facilities, JERA's mission is not only to provide optimal,environmentally conscious power solutions to these countries andregions, but also to create jobs via the power facility construction
process as well as to cultivate human resources through the provision

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findingsof technology and expertise. In turn, these will serve as springboards
for further growth and development of industries, communities, andsocieties. Through these activities, JERA aims to broadly contribute toachieving the Sustainable Development Goals (SDGs) set by theUnited Nations.
Among the materiality issues identified in the JERA Group Integrated
Report 2023", sustainable finance mainly relates to "Adopt andExpand Renewable Energies" and "Decarbonization of Thermal Powerand Fuel Supply Chains."
DNV has confirmed that the implementation plan provided by JERA,
which is established based on the Framework, "JERA Zero CO2Emissions 2050" and "JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan", is well aligned with JERA's Transition Strategy.
Through the assessment, DNV has also confirmed that theimplementation plan established based on its Transition Strategy isreliable, ambitious and achievable.

2

Business model
environmental
materiality

The climate transition strategy
should be relevant to theenvironmentally material parts of anissuer s business model, taking into
account potential future scenarios
which may impact current
determinations concerningmateriality.
Recommended information andindicators:

Confirmed documents:- Framework- JERA Zero Co2Emissions 2050
- JERA Zero CO2Emissions 2050
Roadmap for its
Business in Japan- JERA Environmental
Target 2030
- JERA Environmental
Target 2035
- JERA Group Integrated
Report 2023

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DNV assessed whether the key activities related to JERA's businesscorrespond to the contribution to the environment and the JERA's
transition strategy evaluated.
JERA's non-consolidated greenhouse gas emissions in Japan(FY2020~FY2022) are shown below.
Scope

FY2020

FY2021

FY2022

Scope 1114.95 million t-CO2

121.10 million t-CO2

118.69 million t-CO2

Scope 280,000 t-CO2

40,000 t-CO2

60,000 t-CO2

Scope 330.41 million t-CO2

32.51 million t-CO2

31.21 million t-CO2

Total
amount145.44 million t-CO2 153.65 million t-CO2 149.96 million t-CO2

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

Discussion on the materiality of the- METI, "Transition
roadmap for theelectricity sector"

Scope 1: Direct emissions of greenhouse gases by the company itself(combustion of fuels, industrial processes). (Calculated inaccordance with the Act on Promotion of Measures to Cope with
Global Warming (the Global Warming Prevention Act))
Scope 2: Indirect emissions from the use of electricity, heat and steam
supplied by other companies. (Calculated using adjusted emission
factors from the Emission Factors by Electric Utility published by
the Ministry of the Environment and the Ministry of Economy, Tradeand Industry.
A part of the purchased electricity is replaced by self-transmission
from 2021 onwards, and the self-transmission is included in Scope 1
emissions).
Scope 3: Indirect emissions other than Scope 1 and 2 (emissions from othercompanies related to the company s activities)*Data includes emissions of Hitachinaka Generation Co. Inc.

planned climate transition strategy
may:• be disclosed in the form of a materiality
matrix made publicly available by anissuer or be covered in an issuer sannual reports;• address the materiality of climaterelated eligible projects and/or KPI(s) on
the overall emissions profile of anissuer; and• where Scope 3 emissions are expected
to be material but are not yet identified
or measured, a timeline for reporting
should be disclosed.

Interviews withstakeholders*Scope 2 and 3 cover CO2 only. Scope 1 covers CO2, CH4 (methane), N2O(nitrous oxide), SF6 (sulphur hexafluoride) and HFC (alternative freon).

Given the fact that indirect emissions from power generation accounts
for 38% of the CO2 emissions per final energy consumption in Japan
where JERA operates, the transition strategy of JERA, whose major
emissions come from its thermal power generation, will not only
contribute to reducing emissions from its own business activities(Scope 1 and 2), but also contribute to achieving the decarbonization
goals of diverse entities. In other words, JERA's approach towards
transition aiming to achieve decarbonization at a lower cost andhigher speed while maintaining stable energy supply, will directly
support its own transition as well as the transition of society as awhole.
JERA's roadmap is aligned with the transition roadmap for theelectricity sector of METI. JERA's specific goals and implementation
plan are key initiatives to achieve METI's transition roadmap for theelectricity sector, and its goals and implementation plan are based on
quantified indicators.

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
DNV confirmed that JERA's plan to implement its Transition Strategy
is one of the activities of JERA's core business and is closely linked tothe activities that contribute to the CO₂ reduction of the society as awhole, thus will contribute to the overall environment. JERA's
Transition Strategy is associated with the materiality that JERA has
identified by facilitating GRI standards*1, ISO26000, SASB
standards*2, etc., and will contribute to generate significant positiveenvironmental impacts both qualitatively and quantitatively.
Environmental materiality includes activities that contribute totransitions such as "Adopt and Expand Renewable Energies" and"Decabonization of Thermal Power and Fuel Supply Chains". The
report also discloses domestic Scope 1 through 3, which are theresults of the activities.
*1: Global Reporting Initiative (an international standard providing
ESG-related reporting, management and analysis methods)*2: A disclosure standard developed by the Sustainable AccountingStandards Board on ESG factors that are expected to have a highfinancial impact in the future3

Climatetransition
strategy andtargets to bescience-based

An issuer s climate transition strategy
should reference science-basedtargets and transition pathways.
There is scientific guidance aroundthe required rate of GHG emission
reductions (the GHG emissions
reduction trajectory ) to align the
global economy with the goals of theParis Agreement.

Confirmed documents:- Framework- JERA Zero Co2Emissions 2050
- JERA Zero CO2Emissions 2050
Roadmap for its
Business in Japan- JERA Environmental
Target 2030

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JERA has set a transition plan consistent with the Paris Agreement,
which is science-based, and a transition trajectory consistent with thetransition roadmap for the electricity sector of METI.
This plan is a realistic goal and pathway for reducing CO2 emissions,and is a plan to reduce absolute (total) CO2 emissions.
DNV has confirmed that JERA's Transition Strategy is based on aconsistent measurement methodology based on prescribedassumptions, and that the long-term and medium-term targets forCO2 emission reductions from its own activities are quantified as
emissions intensity and absolute values or ratios. Transition targets
are set voluntarily based on initiatives to utilize the TCFD etc. for

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

The planned transition trajectory- JERA Environmental

should:Target 2035
- JERA Group Integrated
Report 2023
- METI, "Transition
roadmap for theelectricity sector"

sustainable CO2 emission reductions, and are consistent with METI stransition roadmap for the electricity sector, which serves as abenchmark.

• be quantitatively measurable andaligned with the latest available
methodology;• be aligned with, benchmarked, orotherwise referenced to recognised
third-party, science-based trajectories,
where such trajectories exist; whenthird-party trajectories are not available,consider industry peer comparison
and/or internal methodologies/historicalperformance;• be publicly disclosed (ideally inmainstream financial filings), includinginterim targets; and• be supported by independent assurance
or verification.

Specifically, JERA sets out the following transition targets in its
roadmap.
TABLE JERA TRANSITION TARGETS
FY 2030

Interviews withstakeholders

 Reduce carbon emission intensity of thermal power plants by 20%
based on the long-term energy supply-demand outlook for FY 2030 as
set by the government.
 Shut down all inefficient (supercritical or less) coal power plants
 Promote demonstration of mixed combustion with ammonia at highefficiency (ultra-supercritical) power plants
MIDTERM
GOALS

Strongly recommended information

 Promote the development of renewable energy cantered on offshore
wind power projects
 Work to further improve the efficiency of LNG thermal power generation
FY 2035

and indicators:

 Reduce CO2 emissions from domestic operations by at least 60%• short, medium, and long-term GHG
emission reduction targets aligned with
the Paris Agreement;• baseline year and historic emissions(including absolute emissions, where
intensity metrics are the mainindicator);• scenario utilised and methodology
applied (e.g., ACT, SBTi, IEA etc.).
When third-party trajectories are notavailable, industry peer comparison
and/or internal methodologies/historicalperformance;• GHG emission objectives covering all
scopes and most relevant subcategories (Scopes 1, 2 and 3);(relative to FY 2013) by FY 2035.
 Given the expanded adoption of renewable energy based on thenational government s 2050 carbon neutral policy, JERA will strive todevelop and adopt renewable energy in Japan Work to reduce carbon emission intensity from thermal power
generation by promoting hydrogen and ammonia co-firing
LONGTERM

 CO2 zero emissions

GOALS*JERA's roadmap will be refined in stages based on policy and otherassumptions. The roadmap will also be revised if the assumptions change
significantly.

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Ref.

Criteria

Requirements

Work Undertaken• targets formulated in either intensity or
absolute terms, noting, that where
intensity targets are used, projections
on the change to absolute emissions
should also be provided; and• where applicable, use of carbon capture
technology as well as of high-quality
and high-integrity carbon credits, andtheir relative contribution to the GHG
emissions reduction trajectory in linewith best industry practices (e.g., SBTi,
VCMI and ICVCM).

DNV Findings
In Japan, where indirect emissions from electricity account for 38% of
the total CO2 JERA's transition strategy contributes not only to the
reduction of emissions from its own operations (Scope 1 and 2), butalso to the achievement of the decarbonization targets of various
bodies.
Transition initiatives and respective scope emissions are disclosed in"JERA Zero CO2 Emissions 2050", "JERA Zero CO2 Emissions 2050
Roadmap for its Business in Japan" and "JERA Group Integrated
report 2023 , etc.
JERA's Transition Strategy clarifies the process for achieving the goal,
including the future use of CO2 capture technologies. In addition, therelevant categories of Scope 3 are indicated. Note that the use ofcarbon credits has not been decided at this time.

4

Implementationtransparency

and operational expenditures (CapEx

Confirmed documents:- Framework- JERA Zero Co2Emissions 2050
- JERA Zero CO2Emissions 2050
Roadmap for its
Business in Japan- JERA Environmental
Target 2030

and OpEx).

- JERA Environmental

Recommended information andTarget 2035
- JERA Group Integrated
Report 2023
- METI, "Transition
roadmap for theelectricity sector"

Market communication regarding theoffer of a GSS financing instrument
intended to fund an issuer s climatetransition strategy should also betransparent, to the extent
practicable, on the underlying
investment program including capitalindicators:• CapEx roll-out plan consistent with theoverall climate transition strategy andclimate science and discussion of how it
informs CapEx decision-making within
the organisation;

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DNV confirmed that the investment and project plans related to
JERA's transition strategy included consensus building as well as its
summarized results and impacts towards investments andexpenditures that has been implemented and are scheduled in the
future. The plan includes investments of around 650 billion yen ingreen projects, mostly renewable energy and other decarbonizationrelated projects, and the phasing out of projects that do not conformto the transition. DNV also confirmed that the overall investment plan
(investment amount) will be executed in accordance with thetimeline. DNV confirmed that in order to ensure transparency, JERA
will discuss on the disclosure, wherever possible, of its basic
investment plan (investment amount). At this time, the internalcarbon prices are not taken into account in the initiative.
DNV also reviewed the Framework and the ESG management of JERA
and confirmed high transparency in the implementation. JERAJERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements• phase-out plan regarding
activities/products incompatible with theclimate transition strategy (when suchactivities or products are significantly
harmful or display levels of performanceinconsistent with science-based GHG
emission reduction trajectories);• green CapEx, for example thosereferenced under the eligible green
project categories in the Green Bond
Principles, as a percentage of total
CapEx and how the ratio may be
expected to evolve over time;• disclosure on the percentage ofassets/revenues/
expenditures/divestments aligned to thevarious levers;• a qualitative and/or quantitative
assessment of the potential locked-in
GHG emission from an issuer s key
assets and products;• assumptions on the internal cost ofcarbon; and• disclosure on adverse impacts on theworkforce, community and surrounding
environment, and related strategies
used to mitigate those negative impacts.

Work Undertaken

Interviews withstakeholders

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DNV Findings
explained the appropriateness of its execution to DNV and DNVagreed on the appropriateness.

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Schedule-4 Sustainable Finance (with specific use of proceeds) Eligibility Assessment Protocol
The checklist below (GBP/GLP-1 to GBP/GLP-4) is a DNV evaluation procedure created for JERA Sustainable Finance Eligibility Assessment (with specific use ofproceeds) based on the requirements of GBP and GLP. "Confirmed documents" in the "Work Undertaken" includes documents inside the fundraiser and is provided
by JERA as evidence of eligibility judgment for DNV.
In Schedule-4, it is referred to as GBP or GLP according to the practice, but this is the standard to be referred to in the case of financing that specifies the use ofproceeds such as transition projects in transition finance that specifies the use of proceeds based on CTFH and CTFBG, so please read as the meaning of thetransition as appropriate.

GBP/GLP-1 Use of proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1aTypes of funds

The types of green/transition finance areclassified into one of the following types
defined by GBP.
· (Standard) Green/transition Bond/Loan・ Green/transition Revenue Bond/Loan・ Green/transition Project Bond/Loan・ Other

Confirmed
documents:- Framework

Through the evaluation work, DNV confirmed that JERA
Sustainable Finance (bond/loan) fall into the following categories:

Interviews withstakeholders(Standard) Green/transition Bond/Loan

The key to a green/transition bond is thatthe proceeds will be used for agreen/transition project, which should beproperly stated in the legal documents
relating to the security.

Confirmed
documents:- Framework- Investment plan for
the use of proceeds- Information related
to each project

DNV confirmed that JERA Sustainable Finance aims to fundtransition/green projects focused on JERA's environmental goals
and transition strategy, as described in the Framework and
Schedule-1.

1b

Green/transition
Project
Classification

Interviews withstakeholders

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Specifically, all Sustainable Finance Eligible Project Candidates
listed in Schedule-1 are evaluated as conforming to theTransition Strategy, and the proceeds through Sustainable
Finance are planned to be financed one or more of the
Sustainable Finance Eligible Project Candidates. If atransition/green project is pre-selected before the financing is
implemented, this will be disclosed in legal documents.

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Through the assessment, DNV concludes that the Sustainableeligible projects candidates will bring concrete and actual
environmental impacts.
Table JERA's Main Initiatives to Achieve Carbon Neutrality(Sustainable Finance and Nominated Projects)
Project Category

Projects for therealization of zeroCO2 emission
thermal power

Eligibility CriteriaThe expenditures related to demonstration
projects to substitute ammonia/hydrogen forfuels at thermal power plants

The expenditures related to decommissionsof inefficient thermal power plants, with theaim of replacement for high-efficiency
thermal power plants

Green Project
Renewable Energy
ICMA GBP:
Renewable energy(environmental
objectives: climatechange mitigation)

The expenditures related to renewableenergy (onshore/offshore wind, solar)The expenditures related to battery storage** Storage batteries may be classified as transition projects
in addition to green projects, if they are found to comply
with the electricity roadmap, etc.

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1cEnvironmental
benefits

All green projects to which the funds areused should have clear environmental
benefits, the effects of which should beassessed by the issuer and, where
possible, quantitatively demonstrated.

Confirmed
documents:- Framework- Investment plan for
the use of proceeds- Information related
to each projectTransition/green projects will contribute to goals based on JERA s
Transition Strategy, and to low and decarbonized emissions
through the two eligible criteria categories indicated in 1b. The
environmental impact is the reduction of CO2 emissions, which
has been quantitatively or qualitatively evaluated by the issuer.

Interviews withstakeholders

1dRefinancing rate

If all or part of the proceeds are used or
may be used for refinancing, the issuer
will indicate the estimated ratio of theinitial investment to the refinancing and,if necessary. Therefore, it isrecommended to clarify whichinvestment or project portfolio is subject
to refinancing.

Confirmed
documents:- Framework- Investment plan for
the use of proceeds- Information related
to each projectInterviews withstakeholders

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It was confirmed that, prior to the implementation of thesustainable finance, only the outline of each project shall be
disclosed. In the annual report, the outline and progress of eachproject should be reported to the extent practicable, taking into
account the characteristics of the project.
JERA plans to use all proceeds for new investments, refinancing,or both for eligible project candidates included in Schedule-1. If it
is clear in advance whether to make new investment or refinancebefore implementing financing, it will be disclosed in legal
documents. DNV confirmed that if it is not yet clear, the Issuer
plans to disclose the amounts of the proceeds which wasallocated to refinancing through reporting (annual report).

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

GBP/GLP-2 Process for Project Evaluation and Selection
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aProject selection
process

Green/Transition bond issuers should
provide an overview of the process ofqualifying projects for whichgreen/transition bond funding will be
used. This includes (but is not limited to):・The process by which the issuer
determines that the project in question is
included in the business category of aqualified green/transition project.
・ Creation of criteria for eligibility of
projects for which green/transition bondfunding will be used
・ Environmental sustainability goals
In addition to criteria and certifications,the information published by issuers
regarding the green/transition bondprocess also considers the quality of
performance of the issuer's frameworkand environmental sustainability.

Confirmed documents:- Framework- Information related
to each project

DNV confirmed that the issuer has a process and a system ofdetermining the eligibility of projects for which the sustainablefinance, and that the outline is specified in the Framework.

2b

Issuer's
Environmental andSocial Governance
Framework

Interviews withstakeholders

Confirmed documents:- Framework- Information related
to each projectInterviews withstakeholders

The fundraiser complies with environment-related laws,
ordinances and regulations, and considers that the effects ofenvironmental improvement such as CO2 reduction are clear in
the entire life cycle or each process when selecting
transition/green projects to be implemented.
In the operation and implementation of the project, each of thedepartments involved is committed to the preservation of thesurrounding environment.
DNV has confirmed that the transition/green projects
implemented by the fundraiser are consistent with issuer's
management and environmental policies, as well as with thetransition strategy, goals and pathways.

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GBP/GLP -3 Management of Proceeds
Ref.

Criteria

3a

Tracking
procedure-1

Requirements

Work Undertaken

DNV Findings

The net proceeds from ofGreen/Transition bonds should bemanaged in sub-accounts, included in
sub-portfolio, or otherwise tracked. It
should also be certified by the issuer in aformal internal process related to theissuer's investment and financing
operations for the Green/Transition
Project.

Confirmed
documents:- Framework- Funds management
forms of transition
finance- Accounting
regulations

DNV has confirmed that the proceeds by the sustainablefinancing can be tracked in line with the issuer's accounting
system and confirmed the systems or the systems to be planed
for use and the dedicated document to be created and otherdocuments actually used through the assessment, and confirmedthat the management status of the proceeds was proved.

Interviews withstakeholders
3b

Tracking
procedure-2

During the green/transition bondredemption period, the balance of funds
raised that is being tracked should be
adjusted at regular intervals to match theamount allocated to eligible projects
undertaken during that period.

Confirmed
documents:- Framework- Funds management
forms of transition
finance- Accounting
regulations

DNV confirmed that the fundraiser plans to periodically (at least
annually) review the balance of the sustainable finance by theaccounting system, the dedicated document to be created andothers described in 3a during the period from the implementationof the sustainable finance to its redemption or repayment.

Interviews withstakeholders
3cTemporary holding

If no investment or payment has been
made in a qualified green/transition
project, the issuer should also inform theinvestor of the possible temporary
investment method for the balance of
unallocated proceeds.

Confirmed
documents:- Framework- Funds management
forms of transition
finance

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DNV has confirmed that the confirmation process through thefundraiser's accounting system, the dedicated document to becreated and others is structured to ensure that the balance of
unallocated proceeds are recognized sequentially.
DNV confirmed through the Framework and Assessment that thebalance of unallocated proceeds will be managed in cash or cashJERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings- Accounting
regulations

equivalents. DNV has also confirmed that the balance of
unallocated proceeds will be disclosed through reporting on the
allocation status of proceeds.

Interviews withstakeholders

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

GBP/GLP-4 Reporting
Ref.

Criteria

4aPeriodical
Reporting

Requirements

Work Undertaken

DNV Findings

In addition to reporting on the use ofproceeds and the temporary investmentof unallocated proceeds, the issuer willconsider each project at least once a year
for projects to which theGreen/Transition bond proceeds havebeen allocated, taking into account thefollowing: A list of each project should be
provided.
-Confidentiality and competitive
considerations-Outline of each project, expectedsustainable environmental and social
effects

Confirmed
documents:- Framework- Investment planfor the use ofproceeds- Funds
management
forms oftransition finance- Information
related to eachproject
Interviews withstakeholders

DNV confirmed that the fundraiser will report on the sustainablefinance (annual report) until the proceeds are allocated, anddisclose information on the allocation status. As for theenvironmental improvement impacts, DNV confirmed that JERA
plans to conduct reporting on the overview and progress ofprojects for which funds have been allocated until at least thecompletion of allocatin of proceeds.
DNV also confirmed that, even after the allocation plan or
allocation has been completed, the issuer plans to report in atimely manner or in its reporting on any changes in transition
strategy or pathways, or any major changes in the allocation
plan or project implementation status (e.g., interruption of a
project for which allocation has been started, significant
postponement on an annual basis, sale or retirement, etc.).
The report will be disclosed on the website.
<Allocation Status>
 Eligible criteria and amounts to be allocated Balance of unallocated amounts and the management
method Amount of proceeds to be used for refinancing<Environmental Impacts>
 Environmental impacts are disclosed within the scope ofconfidentiality, to the extent practicable, and inconsideration of the characteristics of the project,including an overview of the project (including progress,
completion, operation, etc.) and the expectedenvironmental benefits (e.g. t- CO2/year).

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
 For renewable energy, the types of "installed capacity(MW)," "annual power generation (MWh)," and "annual
CO2 emission reduction amount" are also disclosed.
<Others>
 Efforts to achieve zero CO2 emissions by 2050 will be
reviewed as appropriate in light of policy andtechnological trends, and disclosed as required.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Schedule-5 Sustainable Finance (with general corporate purpose) Eligibility Assessment Protocol
Since JERA Sustainable Finance is executed as a General Corporate Purpose transition-linked bond or loan, which does not specify the use of proceeds, it isevaluated by applying the five elements of SLBP and SLLP required for eligibility evaluation of a bond or loan that does not specify the use of proceeds defined by
CTFH and CTFBG.
The following checklist (SLBP/SLLP 1 to 5) is a DNV evaluation procedure created for JERA Sustainable Finance (Transition Linked Bond or Loan with general
corporate purpose) based on the requirements of SLBP and SLLP.
The "confirmed documents" in the Work Undertaken include public or private documents (materials inside the fundraiser), etc., and are provided by JERA as
evidence of eligibility judgment for DNV.

SLLP/SLBP-1 Selection of KPIs (Key Performance Indicators)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1a

KPI ‒ material
to coresustainability
and businessstrategy

The fundraiser s sustainability performance

Confirmed documents:- Framework- JERA Zero CO2 Emissions
2050- JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan- JERA Environmental Target
2030- JERA Environmental Target
2035- JERA Group Integrated
Report 2023
- SPT calculation sheet
Interviews with stakeholders

DNV reviewed JERA's KPIs related to sustainable financeand confirmed that the selected KPIs are relevant andimportant to JERA's core transition strategy andsustainability management.

is measured using sustainability KPIs thatcan be external or internal. The KPIs should
be material to the fundraiser s coresustainability and business strategy andaddress relevant environmental, social
and/or governance challenges of theindustry sector and be under management s
control. The KPI should be of high strategic
significance to the fundraiser s current and/or future operations;
It is recommended that fundraiser
communicate clearly to investors therationale and process according to which the
KPI(s) have been selected and how the
KPI(s) fit into their sustainability strategy.

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JERA, as a global company that is committed to solving
energy problems not only in Japan but around the world,
considers global warming countermeasures to be a top
management priority. JERA recognizes that thermal
power generation using fossil fuels supports
approximately 80% of Japan's electricity demand whileaccounting for approximately 40% of total CO2 emissions
in Japan, and that reducing CO2 emissions from thermal
power generation is essential to achieving a decarbonizedsociety.
- As the largest power generation company in Japan,
JERA is in a position to proactively lead the realization ofa decarbonized society, and has set forth "JERA Zero
CO2 Emissions 2050" to further accelerate its efforts todate and clarify its long-term vision. JERA aims toachieve zero CO2 emissions in its domestic and overseas

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
operations by 2050, and has first formulated the " JERA
Zero CO2 Emissions 2050 Roadmap for its Business inJapan" which outlines the pathway to zero CO2emissions in its domestic operations. In the " JERA
Environmental Target 2030" announced as a goal to beachieved by FY2030, JERA has set "decrease by 20%
from the emissions intensity of thermal power
generation for the country as a whole, based on thelong-term energy supply and demand outlook for
FY2030 set by the government ". This is clearlycommunicated in the Framework in connection with
JERA's transition strategy.
The KPIs selected for this project are as follows and aredetailed in Schedule-2. CO2 emissions intensity is an
important indicator for JERA's transition strategy andsustainability management, and is a transparent KPI thatis measurable and can be evaluated annually. This KPI
will contribute to both transition strategy andsustainability management to realize " JERA Zero CO2Emissions 2050".
KPI
Scope 1 CO2 emissions intensity in JERA Group's
domestic power generation business

1b

KPI -

KPIs should be measurable or quantifiable

Measurability

on a consistent methodological basis;
externally verifiable; and able to bebenchmarked, i.e. as much as possible using
an external reference or definitions to

Confirmed documents:- Framework- JERA Zero CO2 Emissions
2050- JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan

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DNV concluded that the GHG emissions required for theevaluation of KPIs are in accordance with the GHG
Protocol, a global standard, and are calculated based onthe "Manual for Calculating and Reporting Greenhouse
Gas Emissions" under the "Act on Promotion of Global
Warming Countermeasures", which is externally verifiable
and can be benchmarked against external references.
DNV concluded that the Scope 1 CO2 emissions intensity

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

facilitate the assessment of the SPT s level of- JERA Environmental Target
2030- JERA Environmental Target
2035- JERA Group Integrated
Report 2023
- SPT calculation sheet
Interviews with stakeholdersof the JERA Group's domestic power generation
operations is a reliable indicator.

Confirmed documents:- Framework- SPT calculation sheet
Interviews with stakeholders

DNV confirmed that the KPIs selected by JERA provide aclear evaluation scope and calculation methodology. DNV
concluded that the GHG emissions required for theevaluation of KPIs were in accordance with the GHG
Protocol, a global standard, and were calculated andinformed based on the Manual for Calculating andReporting Greenhouse Gas Emissions under the "Act on
Promotion of Global Warming Countermeasures".

ambition.
Fundraiser are encouraged, when possible,
to select KPI(s) that they have alreadyincluded in their previous annual reports,
sustainability reports or other non-financial
reporting disclosures to allow investors to

DNV confirmed that the KPIs selected by JERA are
consistent with the "Sixth Basic Energy Plan" of the
Agency for Natural Resources and Energy and the"Transition Roadmap for the Electricity Sector" of the
METI, and that the KPIs are appropriately set ascomparable indicators

evaluate historical performance of the KPIs
selected. In situations where the KPIs havenot been previously disclosed, fundraiser
should, to the extent possible, provide
historical externally verified KPI values
covering at least the previous 3 years.

1c

KPI ‒ Clear
definition

A clear definition of the KPI(s) should be
provided and include the applicable scope or
perimeter as well as the calculation
methodology.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/ SLLP -2. Calibration of SPT（Sustainability Performance Targets）
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aTarget Setting- Meaningful

The SPTs should be ambitious, realistic andmeaningful to the fundraiser s business andbe consistent with the fundraisers overall
strategic sustainability/ESG strategy.

Confirmed documents:- Framework- JERA Zero CO2 Emissions
2050- JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan- JERA Environmental
Target 2030
- JERA Environmental
Target 2035
- JERA Group Integrated
Report 2023
- SPT calculation sheet
Interviews withstakeholders

JERA, as the largest power generation company in Japan,
recognizes that it is in a position to actively lead therealization of a decarbonized society in Japan, and has set
forth "JERA Zero CO2 Emissions 2050" and "JERA Zero CO2Emissions 2050 Roadmap for its Business in Japan" toclarify its long-term vision. In addition, as a target to beachieved by FY2030, JERA has announced in the "JERA
Environmental Target 2030" a "Reduce carbon emission
intensity of thermal power plants by 20% based on thelong-term energy supply-demand outlook for FY2030 as
set by the government."
This target is set as the SPT in JERA's transition finance,
and is consistent with the "Sixth Basic Energy Plan" of the
Agency for Natural Resources and Energy and the"Transition Roadmap for the Power Sector" of the Ministryof Economy, Trade and Industry, as well as being an
ambitious SPT as the largest power producer in Japan.
Achieving this SPT is meaningful to JERA's business as it
relates to reducing GHG emissions, a sustainability
challenge faced by power generators.
On the other hand, in the SPT setting, the SPT is set at avalue of 0.477 kg- CO2/kWh or less after a further 20%
reduction from the estimated national emissions intensityfrom thermal power generation, based on the estimatedvalue of CO2 emissions from electricity-derived energy,
total electricity generation, and the ratio of thermal power
generation in the "2030 Outlook for Energy Supply and
Demand" released by the Japanese government in October
2021.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
SPT estimates assume steady progress in decarbonizing
technologies, economic rationality, and policy consistency.
JERA, as the largest power generation company in Japan,
has made various calculations and studies on how toachieve zero emissions from thermal power generation(reduction of emission intensity, which is the SPT for thisproject, and reduction of CO2 emissions from domestic
operations by at least 60% by FY2035, which is separately
specified) while fulfilling its responsibility for stable energy
supply, and JERA has set the SPT as an ambitious goal
required for transition-linked finance, and as a feasible goalthat can be guaranteed with probability.
DNV concluded that this SPT is realistic, the plan is
feasible, and has a good chance of achieving the SPTs
outlined in the Framework, as well as being consistent with
JERA's Sustainability/Transition Strategy.

2b

Target Setting- Meaningful

SPTs should represent a material
improvement in the respective KPIs and be
beyond a "Business as Usual" trajectory;
where possible be compared to a benchmark
or an external reference and be determinedon a predefined timeline, set before (orconcurrently with) the issuance of the loan.

Confirmed documents:- Framework- JERA Zero CO2 Emissions
2050- JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan- JERA Environmental
Target 2030
- JERA Environmental
Target 2035
- JERA Group Integrated
Report 2023
- SPT calculation sheet

Page 73 of 79

DNV confirmed that this SPT is related to KPI
improvement. This is based on the estimated emissions
intensity from thermal power generation for the country as
a whole, based on the CO2 emissions from electricityderived energy, the total amount of electricity generated,
and the power source composition ratio of thermal power
generation in the "energy supply and demand outlook for
FY2030" released by the Japanese government in October
2021. The SPT is set at 0.477 kg- CO2/kWh or less, whichis the value after a further 20% reduction from therelevant value. It can be said that it is more ambitious than
the national goals and goes beyond "Business as Usual.

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV FindingsInterviews withstakeholders
2cTarget Setting‒ benchmarks

The target setting exercise should be basedon a combination of benchmarking
approaches:
1. The fundraiser s own performance overtime for which a minimum of 3 years,
where feasible, of measurement trackrecord on the selected KPI(s) is
recommended and when possible forwardlooking guidance on the KPI
2. The SPTs relative positioning versus thefundraiser s peers where comparable oravailable, or versus industry or sector
standards

Confirmed documents:- Framework- JERA Zero CO2 Emissions
2050- JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan- JERA Environmental
Target 2030
- JERA Environmental
Target 2035
- JERA Group Integrated
Report 2023
- SPT calculation sheet
Interviews withstakeholders

DNV confirmed that the SPT goal-setting process was
based on an appropriate combination of multiple
benchmarking approaches.
・

framework include " The expenditures related todecommissions of inefficient thermal power plants,
with the aim of replacement for high-efficiency
thermal power plants" and "The expenditures related
to demonstration projects of fossil fuels andammonia/hydrogen co-firing. They are also
recognized as Best Available Technology or othertechnologies that come close in the "Sixth Basic
Energy Plan" of the Agency for Natural Resources andEnergy and the "Transition Roadmap for the Electricity

3. Systematic reference to science-based
scenarios, or absolute levels (e.g. carbon

・budgets) or official
country/regional/international targets or torecognised Best-Available-Technologies orother proxies.

2d

Target setting‒ disclosures

Disclosures on target setting should makeclear reference to:

Confirmed documents:- Framework- JERA Zero CO2 Emissions
2050

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The eligibility criteria defined by JERA in the

Sector" of the METI.
DNV concludes that the SPT is appropriately related to
the goals of the Japanese government. The
framework is also consistent with national guidelines
consistent with achieving the goals of the Paris
Agreement.

DNV confirmed that SPT target setting was properly
disclosed.
・Through the Framework and the JERA Zero CO2Emissions 2050 Roadmap, it explains how GHG

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

1. The timelines of target achievement, the- JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan- JERA Environmental
Target 2030
- JERA Environmental
Target 2035
- JERA Group Integrated
Report 2023
- SPT calculation sheet
Interviews withstakeholders

trigger event(s), and the frequency of
SPTs
2. Where relevant, the verified baseline orreference point selected for improvementof KPIs as well as the rationale for thatbaseline or reference point to be used
3. Where relevant, in what situations
recalculations or pro-forma adjustmentsof baselines will take place
4. Where possible and taking into accountcompetition and confidentiality
considerations, how the fundraiser
intends to reach such SPTs

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DNV Findings
emission reductions will be achieved.
Based on each of the JERA documents provided to DNV,
DNV concluded that the SPT is realistic, the plan is feasible,
and the SPT goals outlined in the Framework are likely to
be met.

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-3 Loan Characteristics
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3a

Bond
Characteristi
cs ‒ SPT
Financial/str
ucturalimpactThe SLB will need to include a financial and/or
structural impact involving trigger event(s)based on whether the KPI(s) reach thepredefined SPT(s).

Confirmed documents:- Framework
Interviews withstakeholders

DNV has confirmed that the framework includes trigger
events and is compliant with the requirements described in
the SLLP.

Bond
Characteristi
cs ‒ Fallback
mechanism

Any fallback mechanisms in case the SPTs

Confirmed documents:- Framework
Interviews withstakeholders

DNV confirmed that JERA has reviewed the appropriate
fallback mechanisms (preliminary alternatives) and, as aresult, has decided not to establish alternative SPTs or
calculation methods at this time because the risks thatcannot be calculated or observed are very small.

3b

cannot be calculated or observed in asatisfactory manner should be explained.
Fundraisers may also consider including,where needed, language in the bond or loan

The financial and structural characteristics of the transition
finance, which is general corporate purpose, executed under
the Framework will change depending on the achievement of
the SPT. It was confirmed that JERA has internal procedures
to ensure that each time a financing is executed, the trigger
event and its scope of impact with specific SPT
measurement timing and performance requirements will belinked to target achievement and financial incentives, anddetails including conditions will be disclosed in the bonddisclosure documents or loan agreement documents.

It was confirmed that JERA intends to disclose an
explanation of the changes in the event of unforeseen events(such as significant changes in regulatory or other systems
or the occurrence of unusual events) that may materiallyaffect the measurement method and scope of KPIs, thesetting of SPTs, and assumptions due to circumstances
unforeseeable at the time of the execution of sustainablefinancing under general corporate purpose, either in thedisclosure documents for the bonds or the loan agreement.

documentation to take into consideration
potential exceptional events.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Changes in the characteristics of the bonds and loans may
be foregone if there are reasonable grounds that theachievement of the SPT will be temporarily missed due totransient changes in domestic electricity supply.

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JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-4 Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aReportingFundraisers of SLBs should publish, and keep readily

Confirmed
documents:- Framework
Interviews withstakeholders

DNV has confirmed that the required information will
be made available to the public in a timely manner for
the following details required by the SLBP/SLLP

available and easily accessible:
Up-to-date information on the performance of theselected KPI(s), including baselines where relevant
A verification assurance report relative to the SPT
outlining the performance against the SPTs and therelated impact, and timing of such impact, on the loan sfinancial and/or structural characteristics
Any information enabling investors to monitor the level ofambition of the SPTs
This reporting should be published regularly, at least
annually, and in any case for any date/period relevant forassessing the SPT performance leading to a potential
adjustment of the SLB s financial and/or structuralcharacteristics.

Page 78 of 79

 KPI performance against SPT: After the execution of
the Transition Linked Finance, Jera will obtain
verification from an external institution at least oncea year, and disclose this information on its website
before the completion of redemption or repayment.
 SPT achievement status: Subject to annual
verification by an independent third party todetermine financial and structural characteristics
 When SPT changes are required：JERA will discusswith the parties concerned the establishment of
SPTs with a level of ambition equal to or greaterthan the existing evaluation standards based on
the changes, and will obtain second-party opinionsfrom third-party evaluation organizations asnecessary.

JERA Co., Inc. JERA Sustainable Finance Framework Second Party Opinion

SLBP/SLLP-5 Verification
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

5aExternal
Verification

Fundraisers should have its performance against each
SPT for each KPI independently verified by a qualified
external reviewer with relevant expertise, at least once a
year and for each SPT trigger event.

Confirmed
documents:- Framework
Interviews withstakeholders

DNV has confirmed that JERA plans to undergo
independent verification of the data related to the
KPIs at least once a year by a qualified external
evaluation body with relevant expertise in SPT
triggering events.

Page 79 of 79