J-POWER Group Green/Transition Finance Framework Second Party Opinion

SECOND PARTY OPINION
J-POWER GROUP
GREEN/TRANSITION FINANCE FRAMEWORK

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 13 July 2023
Ref. Nr.: PRJN-334171-2022-AST-JPN-01-Rev.1

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Table of Contents
Executive Summary

3

I. Introduction

10

II. Scope and Objectives

19

III. Responsibilities of J-POWER and DNV

21IV. Basis of DNV s Opinion

21

V. Work Undertaken

24

VI. Findings and DNV s Opinion

25

VII. Assessment Conclusion

42

Schedule-1 Green/Transition Finance Project Candidate List

44

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

45

Schedule-3 Green/Transition Finance Framework Eligibility Assessment Protocol

46

Schedule-4 Green Finance (or use of proceeds Transition finance) Eligibility Assessment Protocol

51

Schedule-5 Sustainability-Linked Finance Framework Eligibility Assessment Protocol

57

Revision History
Revision
Number0

Date of Issue
17 November 2022

Major changes
First Edition
 Reassessment of SPT ambition in the context of framework amendments due to raised1

13 July 2023

domestic CO2 emission reduction targets for 2030
 Reassessment of eligibility to reflect/update additional requirements due to the update of
the SLLP and GLP in February 2023

Disclaimer
Our assessment relies on the premise that the data and information provided by the fundraiser to us as part of our review procedures have been provided in good faith.
Because of the selected nature (sampling) and other inherent limitations 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 organisation 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 complied with the
DNV Code of Conduct during the assessment and maintain independence where required by relevant ethical requirements. This engagement work was carried out by anindependent team of sustainability assurance professionals. DNV was not involved in the preparation of statements or data included in the Framework except for thisStatement. DNV maintains complete impartiality towards the stakeholders interviewed during the assessment process.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Executive Summary
The J-POWER Group consists of Electric Power Development Co., Ltd. (hereinafter referred to as JPOWER ), 72 subsidiaries and 107 affiliated companies (as of the end of March 2023) and isengaged in "Electric Power Business", "Electric Power-Related Business", "Overseas Business" and"Other Business". Having formulated the Green Bond Framework in December 2020, J-Power issued
its first Green Bond in January 2021, which was the fourth Green Bond certified under the Climate
Bond Initiative in Japan, and its second and third Green Bond in January and November 2022. JPOWER revised the Green Bond Framework and established the J-POWER Group Green/Transition
Finance Framework (hereinafter referred to as Framework ) in response to further exploration of
the carbon neutral strategy in the J-POWER Group and the development of various systems andpolicies related to transition finance. J-POWER also raised proceeds through the Transition-Linked
Loan in February 2023, and revised the Framework by raising CO2 emission reduction targets in
May 2023.
In pursuing these initiatives, J-POWER has set ambitious goals as its medium- and long-term
management goals (environmental targets) and upheld J-POWER BLUE MISSION 2050" and aims
to achieve carbon neutrality and a hydrogen society. J-POWER plans to allocate the proceeds fromgreen/transition finance for the initiatives aimed at realizing these goals.
J-POWER has established the Framework for implementing green/transition finance in a mannerthat conforms to established international frameworks.
The Framework is structured as a comprehensive framework that incorporates the elements
necessary to execute the following type of financing:- Green Finance (Green bonds and loans)- Transition Finance (Use of Proceeds/ General Corporate Purpose transition bonds and loans)

DNV Business Assurance Japan K.K. (hereinafter referred to as "DNV"), as an external reviewer,
evaluated the eligibility of the Framework.
Specifically, DNV provided the eligibility assessment for the Framework by applying the frameworks(such as principles and guidelines) including the following:- Climate Transition Finance Handbook (CTFH), International Capital Market Association (ICMA),
2020- 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 (GBGLs), Ministry of the Environment, 2022
- Green Loan Principles (GLP), Loan Market Association (LMA, et al)., 2023
- Green Loan Guidelines (GLGLs), Ministry of the Environment, 2022
- Sustainability-Linked Bond Principles (SLBP), International Capital Market Association (ICMA),
2020- Sustainability Linked Bond Guidelines (SLBGLs), Ministry of the Environment, 2022
- Sustainability-Linked Loan Principles (SLLP), Loan Market Association (LMA) and others, 2023
- Sustainability Linked Loan Guidelines (SLLGLs), Ministry of the Environment, 2022

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

The following is a summary of the assessment results for each common element indicated in theabove frameworks.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion<CTF Eligibility Assessment Results>
DNV has confirmed the followings based on the documents and information provided by JPOWER. CTF-1 through CTF-4 below are the findings and DNV s opinions against the fourcommon elements (disclosure elements) of the CTFH and CTFBG.
CTF-1. Fundraiser s Climate Transition Strategy and Governance:
The Fundraiser updated the transition strategy in May 2023, increased the target value andreviewed the pathway. This is aligned with the goals set forth in The Sixth Strategic Energy
Plan and the Transition Roadmap for Power Sector formulated by the Agency for Natural
Resources and Energy. J-POWER plans to review the planned transition strategy inaccordance with changes in social trends and the business environment. In terms ofgovernance and disclosure related to the implementation of the Transition Finance, J-POWER
has established an internal structure and information disclosure process based on TCFD*1.
These are disclosed in the Framework and other documents and meet the disclosure elementof CTF-1.
*1: Task Force on Climate-related Financial Disclosures

CTF-2. Business Model Environmental Materiality:
J-POWER has identified 5 issues as materiality in its business model. The materiality that is
the most relevant to this Transition Finance is "response to climate change" and J-POWER has
set the task to close the gap with the current situation in order to achieve the J-POWER BLUEMISSION 2050 . In J-POWER s transition strategy, the J-POWER Group's management
strategy and ESG (Environment, Social, and Governance) initiatives are inseparable. In the JPOWER BLUE MISSION 2050 and Action Plan , specific initiatives are presented and thecontribution to the SDGs, which will be discussed later, is also taken into consideration. These
are disclosed in the Framework and other documents and meet the disclosure element of CTF2.
CTF-3. Climate Transition Strategy to be Science-based including Targets and Pathways:
J-POWER s transition strategy has been formulated based on science-based goals andpathways. Specifically, the medium- to long-term goals for Scope 1 of its domestic power
generation business are measured by indicators and quantified while the process ofachieving those goals is clarified based on the targets set forth in The Sixth Strategic Energy
Plan formulated by the Agency for Natural Resources and Energy and the targets andpathways set forth in the "Transition Roadmap for Power Sector " as described in CTF-1.
These are disclosed in the Framework and other documents or this Second Party Opinion
and meet the disclosure element of CTF-3.
CTF-4. Implementation Transparency:
J-Power has presented the basic investment plan including the amount to be invested to
implement the transition strategy and outlined the results and impact of the implementation.
J-POWER has announced that it will invest approximately 700 billion yen in renewableenergy development, etc. in FY2023‒2030. These are disclosed in the Framework and otherdocuments or this Second Party Opinion and meet the disclosure element of CTF-4.
<GBP/GLP Eligibility Assessment Results>

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

DNV confirmed the following based on the materials and information provided by J-POWER.
GBP/GLP-1 through GBP/GLP-4 described below are the findings and DNV s opinions against
the four common elements of GBP/GLP (including *GBGLs/GLGLs).
GBP/GLP-1. Use of Proceeds:
J-POWER defines the eligibility criteria for the use of proceeds as projects that directly or
indirectly contribute to the realisation of transition strategy and goals ( Green/Transition
Projects ). Specifically, the eligibility criteria are presented together with the action plan
items identified and classified in Table-1. The proceeds will be allocated to financing or
refinancing these projects for capital expenditures, operating and administrative expenses,
equity investments, R&D related expenses, demolition expenses or other related
expenditures. DNV has confirmed that these transition projects are aligned with theelements of CTF-1 to 4. These projects have been evaluated by J-POWER as having clear
and positive environmental impacts in line with the transition strategy and are expected tocontribute directly and indirectly to the SDGs. These processes are consistent with GBP/GLP1.
Table 1: J-POWER Green/Transition Finance Eligibility Criteria
Action Plan Items

CO2 freehydrogenenergyCO2 freepower
generation

Power
network

Hydrogen power
generation

Eligibility Criteria

Green*1 Transition*2

Upcycling (adding gasifiers toexisting facilities)○

Upcycling (adding CO2
separation and capture
equipment to existing facilities)○

CO2 Free Hydrogen Generation
Facilities○○

Fuel production(CO2 free hydrogen)

CO2 Free Hydrogen Production
Facilities○○

Renewable energy

Hydro, wind, geothermal andsolar power○○

Nuclear power

Ohma Nuclear Power Plant

Stabilisation

Distributed Energy Services

Enhancement

Domestic coal-fired thermal power

Relevant
SDGs

○
○

○

Expansion of facilities such as
frequency converter stations○

Network enhancement toaccommodate renewable energy○

Shutdown and decommission ofdeteriorated/aged thermal
power plants○

Facilities for mixed/dedicatedcombustion for biomass andammonia○*1 Projects that have been identified as eligible as green projects can be incorporated as green projects when
implementing green finance in the future. Green projects are also allowed in the CTFBG to be incorporated as part oftransition finance implementation.
*2 Some of the projects currently classified as transition projects may become green projects by the application oftechnological innovations in the future (e.g. application of green fuel/manufacturing process and achievement of CO2
emission standards that meets the criteria for green projects). The eligibility criteria with 〇 for both green andtransition are classified as either or both depending on the individual project.

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

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J-POWER confirms that the projects meet the GBP/GLP-1 eligibility criteria and the standards
required for the Green/Transition Projects and have clear environmental benefits. In
addition, J-POWER confirms that the potential negative environmental/social impacts areappropriately taken into consideration and that the procedures such as certification offacilities/equipment, licensing, and environmental assessment in the regions where theprojects are to be implemented are appropriate. Specifically, the department that oversees
each business selects candidate projects based on the eligibility criteria described in theprevious section, and then the Finance Department confirms that the candidates meet theeligibility criteria and makes a decision. These processes are consistent with GBP/GLP-2.
GBP/GLP-3. Management of Proceeds:
As for the entire amount of proceeds, the Finance Department will manage the balance ofallocated and unallocated proceeds by using the J-POWER s internal system and forms suchas the proceeds management table, and the fund management code assigned to eachproject. The total amount of eligible projects will be managed using an accounting system or
the proceeds management table to ensure that the total amount does not fall below theGreen/Transition Finance proceeds. The proceeds will be managed in cash or cash
equivalents in an amount equal to the unallocated proceeds until the proceeds will be fully
allocated.
GBP/GLP-4. Reporting:
J-POWER will report the allocation of the proceeds in its Integrated Report, on its website, orto the lenders (in the case of loans) until the proceeds will be fully allocated. This includes
the allocated amount, the balance of unallocated proceeds, and the approximate amount (orthe share) of the proceeds allocated for refinancing. In addition, the outline and theenvironmental benefits of the projects to which the proceeds have been allocated will be
disclosed within the scope of confidentiality obligations and to the extent reasonably
practicable. Any major changes in transition strategy, pathways, allocation plan or
performance will be reported.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion<SLBP/SLLP Eligibility Assessment Results>
Based on the documents and information provided by J-POWER, DNV has confirmed thefollowing. SLBP/SLLP-1 through SLBP/SLLP-5 described below are the findings and DNV s
opinions against the five elements of SLBP/SLLP (*including SLBGLs/SLLGLs).
SLBP/SLLP-1. Selection of Key Performance Indicators (KPIs):
One KPI (reduction of CO2 emissions (domestic power generation business)) related toenvironmental sustainability (transition) set by J-POWER shown in Table-2 is an important
indicator in a comprehensive transition strategy for the J-POWER BLUE MISSION 2050 set
forth by J-POWER as an energy company. The selection of KPIs has gone through a rational
process, and KPIs are considered to be clearly defined, measurable and verifiable, and haverobustness and reliability in accordance with SLBP/SLLP.
SLBP/SLLP-2. Calibration of Sustainability Performance Targets (SPTs):
J-POWER's SPTs (CO2 emission reduction amount (domestic power generation business)/
CO2 emission reduction rate (domestic power generation business)) shown in Table-2 aremeaningful for J-POWER's sustainability (transition) and business strategy required as anenergy company, closely relevant, and show significant improvements according to the preset timeline. The SPTs shown in Table-2 consist of two items: reduction of CO2 emissions(domestic power generation business) and CO2 emission reduction rate (domestic power
generation business). Each SPT has been set based on the benchmarks of J-POWER s mostrecent performance level and the GHG emission reduction target for FY2030 set forth by the
Agency for Natural Resources and Energy. Regarding the ambitiousness of each SPT, DNV
has confirmed that J-POWER s substantive contribution to reducing CO2 emissions is
consistent with the ambitious target of 46% set forth in "The Sixth Strategic Energy Plan
and confirmed that the contribution to future CO2 reduction will exceed "Business as Usual"and is consistent with the ambitious national target. Through the review, DNV has confirmedthat J-POWER s plan is feasible for the achievement of the SPT in FY2025/FY2030. The
following SPTs are not set for each year due to the fact that the amount of electricity
generated by power supply and demand conditions cause fluctuations in the amount ofelectricity generated by power supply and demand, and that initiatives need to be
implemented with due consideration from the perspective of ensuring electricity supply
capacity.
SLBP/SLLP-3. Finance characteristics:
The financial characteristics of the Transition-Linked Finance based on the Framework will be
impacted by the performance of the KPIs defined by the SPT. This impact is due to the factthat the bond or loan is linked to changes in bond issuance rates, loan interest rates, orother financial incentives (for example, donations to organisations that conduct activities
closely related to the set KPI). DNV has confirmed that these will be stipulated in formal
documents related to the bond or loan at each financing execution by a specific trigger event(SPT achievement status) within a defined period/due date based on the Framework.
Changes in the characteristics of the bond/loan may be foregone if there are reasonablegrounds for a temporary non-achievement of the SPT due to transient changes in domestic
electricity supply capacity.

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SLBP/SLLP-4. Reporting:
The reporting is planned to include the information required in the SLBP/SLLP and the
Framework stipulates that the reporting is to be made publicly available or disclosed to thelenders (in the case of loans) at an appropriate frequency.

SLBP/SLLP-5. Verification:
J-POWER intends to have the data relating to the KPIs independently verified annually byan external evaluation agency.

Table-2: J-POWER Transition-Linked Finance KPIs and SPTs
(One or more of the following KPIs and SPTs are selected for specific transition-linked finance).
KPIs

SPTs

KPI 1: CO2 emissions Reduction

SPT1: Reduction of 9.2 million tons in FY2025 (compared to the(J-POWER Group domestic power

performance for FY2013)

generation business)

SPT2: 46%*/22.5 million tons reduction in FY2030 (compared to theperformance for FY2013)

Description of KPIs

Description of SPTs

The KPIs are set with items thatare closely related to J-POWER s
Medium-Term Management Plan.

Each SPT refers to the target figures in the roadmap, and the figures arelinked to the transition strategy of J-POWER.

KPI 1: Reduction of CO2 emissions
This is a core KPI for J-POWER s
Expansion of CO2 free powersources , CO2 free hydrogenenergy and zero emissions of
power sources and Power
network on the supply side andit is quantifiable andcontinuously measurable basedon the GHG Protocol.

SPT1: CO2 emission reduction amount
SPT2: CO2 emission reduction amount and CO2 emission reduction rate
The substantive contribution to CO2 emission reduction is consistent
with the ambitious target of 46% set forth in "The Sixth Strategic
Energy Plan" and it can be evaluated that its future contribution to CO2emission reduction will exceed "Business as Usual and that it isconsistent with the ambitious national target.
The SPT trigger events may be set by linear interpolation between theactual emission for the base year of FY2013 and targets by FY2025
and/or FY2030, or may be set individually when future detailed plans
are drawn up.

Based on the assessment of the Framework and other relevant documents and information
provided by J-POWER, DNV has confirmed that the Framework established by J-POWER meetsthe standards required by the relevant frameworks, namely, CTFH/CTFBG, GBP/GBGLs,
GLP/GLGLs, SLBP/SLBGLs, and SLLP/SLLGLs and thus is eligible as transition finance.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

I. Introductioni.

About the Fundraiser
The J-POWER Group consists of Electric Power Development Co., Ltd. (hereinafter referred toas "J-POWER ), 72 subsidiaries and 107 affiliated companies (as of the end of March 2023).
The J-POWER Group engages in "Electric Power Business", "Electric Power-Related Business","Overseas Business", and "Other Business".

ii.

Fundraiser s Initiatives for ESG/SDGs
Under a Corporate Philosophy of We will meet people s needs for energy without fail, andplay our part for the sustainable development of Japan and the rest of the world, the JPOWER Group has worked to improve its corporate value by contributing to the achievementof an affluent society through its business activities. In July 2021, The J-POWER Groupidentified five issues as materiality among social issues of importance to the J-POWER Group,
taking into consideration the factors including the interests of its stakeholders, their relevanceto its corporate philosophy, and their impact on its business. The J-POWER Group also aims
to contribute to the achievement of the SDGs through their internal penetration, integration
into its business strategies, the formulation of goals and KPIs for each issue, and initiatives
to address them.
Among these, the materiality primarily relevant to the Green/Transition Finance is response
to climate change".
Figure-1 Materiality for increasing corporate value andthe SDGs to which they contribute
Materiality
Supply ofenergyResponse to
climatechangeInitiatives








Stable operation of electric facilities
Preparation for/and response to natural
disasters
Strengthening of cyber security
Reduction of greenhouse gases (GHG)
Development of renewable energy
Pursuit of the possibility of CO2-freehydrogen
Steady promotion of the Ohma Nuclear
Power Plant Project, with safety as amajor prerequisite

Respect forpeopleRespect for human rights
Human resources development
Assurance of occupational health and safety
Promotion of diversity

Engagementwith local
communities

Preservation of the local environment
Creation of relationships of trust with local
communities

Enhancementof ourbusinessfoundation

Enforcement of corporate governance
Enforcement of compliance
Strengthening of our profit and financial bases

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Contribution to the SDGs

J-POWER Group Green/Transition Finance Framework Second Party Opinioniii. Fundraiser s Environmental Initiatives
J-POWER has set ambitious medium- to long-term management goals (environmental goals)
for the J-POWER Group and has been working to promote low-carbon power sources andelectrification by utilising renewable energy and nuclear power in order to realise a low-carbon
and sustainable society. In addition, in February 2021, J-POWER formulated the J-POWER
BLUE MISSION 2050 and declared its commitment to the challenge of achieving carbon
neutrality.
Furthermore, in April 2021, J-POWER formulated the "Action Plan" which incorporates specificaction plans within the "J-POWER Medium-Term Management Plan for FY2021-FY2023" inorder to increase corporate value while tackling the challenge of transitioning to carbon
neutrality by 2050. J-POWER also raised CO2 emission reduction targets in May 2023.
In line with these plans, the J-POWER Group will strive to increase its corporate value by taking
on multifaceted challenges to transition to carbon neutrality, especially toward decarbonisation of energy supply.
Table-2: J-POWER s Participation in External Initiatives and Efforts
External Initiatives
Task Force on
Climate-related
Financial Disclosures(TCFD)

United Nations Global Compact (UNGC)

Sustainable
Development Goals(SDGs)J-POWER s Efforts Initiatives
The J-POWER Group endorsed the TCFD in May 2019 and has
been working to contribute to the sustainable development ofJapan and the world through strengthening its ESG-related
initiatives, aiming at harmonising energy supply andenvironment.
The J-POWER Group signed the UNGC in April 2021 and has
been working to contribute to the sustainable development ofJapan and the world through clearly stating its corporate
stance on ESG and strengthening its initiatives.
J-POWER identified materiality as key management issues in
July 2021, clarified their relevance to the SDGs and has beenworking to realise its management vision.
Challenge Zero is an initiative launched by Keidanren incooperation with the Japanese government to realise a"decarbonised society", the goal of the Paris Agreement.
Participating companies and organisations declare theircommitment to innovation challenges toward the decarbonised
society, as well as concrete actions they intend to take. The
followings are the five innovation challenges J-Powerregistered.

Challenge Zero・ Realisation of next-generation thermal power generation(oxygen-blown IGCC) suitable for CO2 capture
・ Development of the ultimate next-generation thermal power
generation (oxygen-blown IGFC)
・ Production of CO2-free hydrogen by brown coal gasification
・ Development of carbon recycling fuel/chemical production
technology using marine microalgae
・ Development of coal ash weight block material with blue
carbon promoting effect

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

GX League

GX League is an industry-government-academia systemformed by the Ministry of Economy, Trade and Industry (METI)
to take on the challenge of quickly transitioning to a carbonneutral society from the perspective of creating a virtuous
cycle between the economy and the environment, with a viewto achieving carbon neutrality by 2050. J-POWER officiallyjoined the GX League in time for its full-scale operation in
2023.

iv. About the Green/Transition Finance Framework
In pursuing the J-POWER BLUE MISSION 2050 and the Action Plan , J-POWER has
set targets for CO2 emission reduction in alignment with its contribution to thegreenhouse gas emission reduction targets set forth in The Sixth Strategic Energy
Plan and the Transition Roadmap for Power Sector formulated by the Agency for
Natural Resources and Energy.
J-POWER intends to procure the funds necessary for achieving the CO2 emission
reduction targets and for conducting transition activities through the Green/Transition
Finance and aims to expand the foundation of the Green/Transition Finance while
enhancing the ability to disseminate its strategy by expanding the link with finance.
J-POWER has established the J-POWER Group Green/Transition Finance Framework(hereinafter referred to as "Framework") to ensure that the Green/Transition Finance iscarried out in conformity with the established international frameworks. The criteria towhich this Framework specifically referred are listed in Section II, (3) below.

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J-POWER Group Green/Transition Finance Framework Second Party Opinionv.

Fundraiser s Transition Strategy for Decarbonisation(1) Strategies by Sector (Industry) at the International/National/Regional Level
Figure-2 shows the scenario for decarbonisation in the electric power sector as set forth in
the Transition Roadmap for Power Sector formulated by the Agency for Natural
Resources and Energy.
The Sixth Strategic Energy Plan formulated in October 2021 and the Transition
Roadmap for Power Sector formulated in February 2022 by the Agency for Natural
Resources and Energy consist of initiatives to achieve carbon neutrality by 2050 andefforts to be made by 2030 in anticipation of the achievement by 2050. In the electric
power sector, the main pillar of the plan and the roadmap is the emission reduction
utilizing various technologies, including the following: expansion of non-fossil energy
introduction through electrification and hydrogenation in light of decarbonisation on the
supply side; initiatives to make renewable energy the main power source; optimal use of
nuclear and thermal power generation; and reinforcement and sophistication of the powertransmission and distribution network.
The plan and the roadmap have set a target by FY2030 to reduce greenhouse gas
emissions by 46% compared to FY2013 as an indicator corresponding to the short- to
medium-term goals based on The Sixth Strategic Energy Plan shown in Figure-3. As aneven more ambitious target, they set a target of 50% reduction (compared to FY 2013).

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Figure-2: Transition Roadmap for Decarbonizing Power Sector

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J-POWER Group Green/Transition Finance Framework Second Party Opinion(Transition Roadmap for Power Sector, Agency for Natural Resources and Energy, February 2022)

In addition, they have set a goal of achieving carbon neutrality by 2050 as an indicator
corresponding to the long-term goal. J-POWER aims to simultaneously ensure the stablesupply of energy as its mission and appropriate responses to climate change issues basedon the reduction targets and policies necessary for Japan to achieve carbon neutrality by
2050 and the targets of the Paris Agreement.

Figure-3: The Sixth Strategic Energy Plan,
Point (1) of Outlook for Energy Supply and Demand in FY2030(Transition Roadmap for Power Sector, Agency for Natural Resources and Energy, February 2022)(2) Fundraiser s Transition Strategy
J-POWER positions the following activities as "transition strategy": activities that
contribute to the greenhouse gas emission reduction targets that are aligned with "The
Sixth Strategic Energy Plan" formulated by the Agency for Natural Resources and Energy;
and activities to realise the J-POWER BLUE MISSION 2050 formulated by J-POWER.
J-POWER revised its transition strategy in May 2023. Table-3 shows J-POWER s long-term
and medium-term goals and Figure-4 shows the J-POWER BLUE MISSION 2050
Roadmap. J-Power s targets for reducing Scope 1 emissions from its domestic power
generation business which emits the largest amount of CO2 in the J-POWER group are as
follows: net zero emissions by 2050; a reduction of 46% (compared to the actual
emissions for FY2013) or a reduction of 22.5 million tons by FY2030; and a reduction of
9.2 million tons by FY2025. J-POWER is working to achieve these targets as shown in
Figure-4. These domestic reductions have been confirmed to be aligned with thegreenhouse gas emission reduction set forth in "The Sixth Strategic Energy Plan"
formulated by the Agency for Natural Resources and Energy. In addition, regarding
renewable energy, J-POWER is steadily working towards carbon neutrality, setting a targetof a development of 1,500 MW or more new renewable energy capacity globally and anincrease of 300 million kWh/year in hydroelectric power generation (both compared to
FY2017) by FY2025.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

It is clearly stated that this roadmap will be updated and detailed as needed based on
government policy conditions and the progress of industry development on which it ispredicated, and that the contents will be reviewed as prerequisites change. J-POWER has
confirmed its corporate intention to consider changing its initiatives to an even more
ambitious ones towards the global net zero emissions by 2050.
J-POWER has also presented the investment plan for "expansion of CO2 free power sources","CO2 free hydrogen energy and zero-emission power sources", and "power network", all ofwhich are set forth to realise the J-POWER BLUE MISSION 2050 . (Table-5: Investment
Plan to Achieve the Roadmap)
Table-3: Long-term and medium-term goals based on the Roadmap
Item
J-POWER Groupdomestic power
generation business
CO2 emissions
Renewable energy(hydro, wind,geothermal, solar)

Target value
Target for FY2025: Reduction of 9.2 million tons*
Target for FY2030: Reduction of 46%/22.5 million tons**Compared to FY2013
Target for 2050: Net zero emissions
Target for FY2025:
New development of 1,500 MW or more globally (compared to FY2017)
Increase in hydroelectric power generation by 300 million kWh/year(compared to FY2017)

Figure-4: J-POWER "BLUE MISSION 2050" Roadmap

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Table-4: J-POWER Group Greenhouse Gas Emissions (Scope 1-3)
Item
Scope1

FY 201953.97 million t-CO2

FY202053.58 million t-CO2

FY202147.95 million t-CO2

Scope20.11 million t-CO2

0.13 million t-CO2

0.14 million t-CO2

Scope322.22 million t-CO2

15.27 million t-CO2

13.60 million t-CO2

Total

76.31 million t-CO2

68.98 million t-CO2

61.68 million t-CO2

The data show emissions by J-POWER and its domestic and overseas consolidated subsidiaries, reported in the JPOWER Integrated Report 2022 Supplementary Material <Environment> (taking into account of the investment
ratio).

Table-5: Investment Plan to Achieve the Roadmap
Roadmap Items
Expansion of CO2free power sources
Zero-emission
power sources

Power network

investment plan
-New development of renewable energy (1,500 MW)-Construction and start of operation of nuclear power sources (Ohma Nuclear
Power Station (1.38 million kW))
-Domestic coal-fired thermal power (phase-out of deteriorated/aged power
plants and shift to low carbon (mixed combustion with biomass and mixed
combustion with ammonia)-Upcycling for Hydrogen Power Generation (GENESIS Matsushima)-Production of hydrogen fuel (with demonstration tests overseas)-Stabilisation (Hydroelectric power generation with excellent output adjustment
capabilities, hydrogen power generation through coal gasification, anddistributed energy services)-Enhancements (construction of new Sakuma Frequency Converter Station andreinforcement/reconstruction of related transmission lines)

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J-POWER Group Green/Transition Finance Framework Second Party Opinion(3) Fundraiser s Governance (Structure for Environmental Initiatives)
J-POWER has established sustainability promotion structures led by the President and Chief
Executive Officer (ESG Oversight) in order to ensure the realisation of the J-POWER BLUEMISSION 2050 and tackle overall ESG (Environmental, Social and Governance) issues.
Furthermore, to promote sustainability including environmental initiatives, J-POWER has
established the meeting bodies called Sustainability Promotion Board and the group-wide
J-POWER Group Sustainability Promotion Conference .

Figure-5: Sustainability Promotion Structures
In addition, J-POWER revised J-POWER Group Environmental Basic Policy in August 2021
and clearly state that it will work on realising carbon neutrality.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Figure-6: J-POWER Group Environmental Basic Policy
Name of Fundraiser: The Electric Power Development Co., Ltd. ( J-POWER )Framework Name: J-POWER Group Green/Transition Finance Framework
Name of External Reviewer: DNV Business Assurance Japan K.K.
Date of Report: 13 July 2023

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

II. Scope and Objectives
DNV has been commissioned by J-POWER to provide a pre-funding assessment of the
Framework. The objective of the pre-funding assessment by DNV is to implement anassessment on whether J-Power s initiatives meet the criteria established in CTFH/CTFBG,
GBP/GBGLs, GLP/GLGLs, SLBP・SLBGLs, and SLLP/SLLGLs described below and provide a
Second Party Opinion on the eligibility of the Framework.
DNV, as an independent external reviewer, has identified no real or perceived conflicts ofinterest associated with the delivery of this Second Party Opinion for J-POWER.
In this report, no assurance is provided regarding the financial performance of, the value of
any investments in, or the long-term environmental benefits of, J-POWER s Green/Transition
Finance.

Green Finance and Use of Proceeds Transition Finance Instruments*Although the following items are based on GBP, they may be replaced with the loan-specific items as
appropriate.

(1) Scope of Review*
The review assessed the following elements and confirmed their alignment with the gist of the four coreelements of GBP/GLP:⊠

Use of Proceeds⊠

Process for Project Evaluation and Selection⊠
Management of Proceeds⊠
Reporting＊The scope of the review is applied as the evaluation of Use of Proceeds transition finance instruments.
＊The four disclosure elements of CTFH and CTFBG are also included in the scope of the review.

(2) Role(s) of Review Provider (Use of Proceeds Transition Finance)⊠

Second Party Opinion☐

Certification☐

Verification☐

Rating☐Other:

General Corporate Purpose Transition Finance Instruments*Although the following items are based on SLBP, they may be replaced with the loan-specific items as
appropriate.

(1) Structure of Bonds at the Time of Issue⊠

A step-up structure⊠

A variable redemption structure*Any of the above or other structures set individually based on the fundraiser s internal processes at thetime of financing execution.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion(2) Scope of Review*
The review assessed the following elements and confirmed their alignment with the gist of the five coreelements of the SLBP/SLLP.
Assessed all the following elements⊠☐
Assessed some elements only (partial review)(complete review)⊠

Selection of KPIs⊠

Bond characteristics⊠

Calibration of SPTs⊠

Reporting⊠

Verification⊠

In addition, confirmed theiralignment with the SLBP*The scope of the review is applied as the evaluation of General Corporate Purpose transition financeinstruments.
*The four disclosure elements of CTFH and CTFBG are also included in the scope of the review.

(3)Role of the Review Provider⊠

Second Party Opinion☐

Certification☐

Verification☐

RatingStandards/Guidelines Applied
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Standards/Guidelines

Scheme Owner
International Capital Market Association (ICMA),
Climate Transition Finance Handbook (CTFH)
2020
Financial Services Agency, Ministry of Economy,
Basic Guidelines on Climate Transition FinanceTrade and Industry, Ministry of the Environment,*1(CTFBG)
2021
International Capital Market Association (ICMA),*2 3
Green Bond Principles (GBP)
2021
Green Bond Guidelines (GBGLs)*2 3
Ministry of the Environment, 2022
Green Loan Principles (GLP)*2 3
Loan Market Association (LMA) et al., 2023
Green Loan Guidelines (GLGLs)*2 3
Ministry of the Environment, 2022
International
Capital Markets Association (ICMA),
Sustainability-Linked Bond Principles (SLBP)*4
2020
Sustainability Linked Bond Guidelines (SLBGLs)*4
Ministry of the Environment, 2022
Sustainability-Linked Loan Principles (SLLP)*4
Loan Market Association (LMA) and others, 2023
Sustainability Linked Loan Guidelines (SLLGLs)
Ministry of the Environment, 2022
*4
*1

*1 Climate transition: The concept of climate transition focuses principally on the credibility of an fundraiser s climatechange-related commitments and practices. (Quote from CTFH and CTFBG)*2 Applied to confirm that the Transition Finance is consistent with the four core elements (i.e., Use of proceeds,
Process for Project Evaluation and Selection, Management of Proceeds, and Reporting) that should be met when
executing Use of Proceeds bonds or loans that meet the four elements of transition. (Edited quote from CTFBG)*3 Regarding green projects, DNV conducted the eligibility assessment by using the technical standards that can bereferenced among the Climate Bonds Standards established by the Climate Bond Initiative.
*4 Sustainability-Linked loan: Sustainability-linked loans are any types of loan instruments and/or contingent facilities(such as bonding lines, guarantee lines or letters of credit) which incentivise the borrower s achievement of
ambitious, predetermined sustainability performance objectives. (Quoted from SLLP. *The evaluation for SLBP is
conducted based on a similar definition.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

III. Responsibilities of J-POWER and DNVJ-POWER has provided the information and data used by DNV during the delivery of thisreview. DNV s Second Party Opinion represents an independent opinion and is intended to
inform J-POWER and the stakeholders of the Transition Finance whether the establishedcriteria have been met based on the information provided to us. In our work, we haverelied on the information and the facts provided to us by J-POWER. DNV is not responsible
for any aspect of the nominated 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 the information or data provided by J-POWER s management used as abasis for this assessment were not correct or complete.

IV. Basis of DNV s Opinion
To provide a protocol as flexible as possible for the Fundraiser, DNV has developed theGreen/Transition Finance Eligibility Assessment Protocol (hereinafter referred to as"Protocol") which incorporates the requirements of CTFH/CTFBG, GBP/GBGLs, GLP/GLGLs,
SLBP/SLBGLs, and SLLP/SLLGLs. Please refer to Schedules 2 and below. This Protocol isapplicable to green/transition finance and transition-linked finance based on CTFH/CTFBG,
GBP/GBGLs, GLP/GLGLs, SLBP/SLBGLs, and SLLP/SLLGLs.
DNV provides the Second Party Opinion according to the Protocol as an independent
external reviewer.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV s opinion.
The overarching principles behind green/transition finance and transition-linked financewhich form the basis for the opinion are as follows:-

Enable capital-raising and investment for new or existing projects with environmental
benefits-

Provide the investment opportunities necessary for climate transition finance to be
executed with transparency and credibility."-

Through KPIs and SPTs, encourage the achievement of the fundraiser s ESG(regarding climate transition) that are material (for climate transition), quantifiable,
predetermined, ambitious, regularly monitored and externally verifiable.

According to DNV s Protocol, the criteria against which this Green/Transition Finance andTransition-Linked Finance has been reviewed are grouped into common elements below,
as set forth in CTFH/CTFBG, GBP/GBGLs, GLP/GLGLs, SLBP/SLBGLs, and SLLP/SLLGLs.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion(1) Four Common Elements of CTFH and 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 to be Science-based including Targets
and 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 Common Elements of GBP/GBGLs and GLP/GLGLS
Principle One: Use of Proceeds
The Use of Proceeds criteria are defined by the requirement that the fundraiser
raising funds through green finance and transition finance in the format of Use ofProceeds instruments should use the proceeds from green/transition finance for
eligible projects. The eligible projects are those that provide clear environmental
benefits.
Principle Two: Process for Project Evaluation and Selection
The Project Evaluation and Selection criteria are defined by the requirements thatthe fundraiser raising funds through green/transition finance should outline (1) theprocess it follows when determining the eligibility of an investment for which theproceeds from green/transition finance will be used and (2) how it takes into
consideration the impact the project will make on its objectives.
Principle Three: Management of Proceeds
The Management of Proceeds criteria are defined by the requirements that thefundraiser should (1) track the green/transition finance, (2) develop separate
portfolios if necessary, and (3) announce how unallocated funds will be managed.
Principle Four: Reporting
The Reporting criteria are defined by the recommendation that the fundraiser
should report to the bond investors or loan lenders at least on how the proceeds
have been allocated and provide a sustainability report using qualitative andappropriate performance indicators and, where feasible, quantitative performancemeasures.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion*1(3) Five Elements of SLBP/SLBGLs and SLLP/SLLGLs＊ Sustainability may be replaced with transition as necessary.

Principle One: Selection of Key Performance Indicator (KPIs)
The fundraiser of a sustainability-linked finance should clearly communicate (tolenders) its overarching sustainability objectives as set forth in its sustainability
strategy and how these relate to its proposed SPTs. The KPI should be reliable,material to the fundraiser s core sustainability and business strategy, address
relevant ESG challenges of the industry sector, and be under management control.
Principle Two: Calibration of Sustainability Performance Targets (SPTs)
The SPTs should be ambitious, meaningful and realistic. SPTs should be set ingood faith and based on sustainability improvements in relation to apredetermined performance target benchmark.
Principle Three: Financial Characteristics
The finance should include a financial and/or structural characteristics of selected
KPI(s) depending on whether the selected KPIs reach (or not) the predefined
SPT(s). The finance documentation is required to include the definitions of the
KPI(s) and SPT(s) and the potential 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 a satisfactory manner, should be explained.
Principle Four: Reporting
Fundraisers should publish and keep readily available and easily accessible up todate information on the performance of the selected KPI(s), as well as averification assurance report (see Principle 5) outlining the performance against
the SPTs and the related impact and timing of such impact on the loan s financial
and/or structural characteristics. Such information should be disclosed toinvestors or lenders at least annually during their participation in financing.
Principle Five: Verification
Fundraisers should seek independent and external verification of their performancelevel against each SPT by a qualified external reviewer with relevant expertise at least
once a year. The verification of the performance against the SPTs should be madepublicly available.
*1: The Sustainability-Linked Finance DNV Assessment Protocol consists of five requirements
set under SLBP (2020)/SLLP (2023) and includes SLBGLs/SLLGLs.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

V. Work Undertaken
Our work constitutes a comprehensive review of the available information, based on theunderstanding that the information was provided to us by J-POWER in good faith. We havenot performed an audit or other tests to check the veracity of the information provided tous. The work undertaken to form our opinion included:i. Pre-funding Assessment (Green/Transition Finance Framework)Creation of the J-POWER-specific assessment protocol for the purpose of
application to J-POWER Green/Transition Finance with respect to the above and
Schedules 2 and below, which contribute to this assessment.



Assessment of documentary evidence provided by J-POWER on theGreen/Transition Finance and supplemental assessment by a comprehensive
desktop research. These checks refer to the latest best practices in assessments aswell as standard methodologies.

Discussions with J-POWER and reviews of relevant documentation.



Documentation of findings against each element of the criteria.

ii. Post-funding Assessment (*not included in this report)Interviews with the management of J-POWER and evaluation (or verification) of therelevant document control.

On-site visits and inspections (if necessary).

Documentation of post-funding assessment results.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

VI. Findings and DNV s Opinion
The summary of DNV s findings and opinion are as described in (1) to (3) below.
CTF-1 through 4 under (1) are the findings and DNV s opinions against the disclosure
elements of CTFH/CTFBG applied to the Green/Transition Finance. See Schedule-3 fordetails.
GBP/GLP-1 through 4 under (2) are the findings and DNV s opinions against the fourcommon elements of GBP/GBGLs and GLP/GLGLs. Please see Schedule-4 details.
SLBP/SLLP-1 through 5 under (3) are the findings and DNV s opinions against therequirements of SLBP/SLBGLs and SLLP/SLLGLs regarding Sustainability (Transition)Linked Finance*1 applied in sustainable finance. Please see Schedule-5 for details.
*1: A Bond or Loan with potential variation of financial and/or structural characteristics
that is linked to the achievement status of future transition goals.
(1) Findings and DNV s Opinions against the Four Common Elements (Disclosure
Elements) of CTFH/CTFBG
CTF-1.

Fundraiser s Climate Transition Strategy and Governance-

In February 2021, J-POWER formulated the J-POWER BLUE MISSION 2050 .
The J-POWER Group's management strategy and ESG (environment, social,and governance) initiatives are inseparable, and the strategies presented in the"J-POWER Medium-Term Management Plan for FY 2021- FY2023" and theAction Plan are both linked to ESG. In addition, the J-POWER BLUE MISSION
2050 Roadmap shows the medium- to long-term goals by FY2030 and by
2050 as well as the transition strategy and pathways/trajectories. J-POWER
revised its transition strategy in May 2023, raised the target value and reviewed
the pathway.

-

DNV has reviewed and confirmed that the science-based goals quantified by JPOWER are aligned with the goals of the Paris Agreement*2 with respect totheir scope (Scope 1 for domestic power generation business).
*2: The FY2030 target set by J-POWER (46%/22.5 million tons reduction, compared to
FY2013) is a reduction rate that is consistent with the WB2°C (Well Below 2°C) targetof the Paris Agreement as well as the Sixth Strategic Energy Plan.

-

J-Power s transition strategy incorporates the results obtained from the TCFD
scenario analysis and the reduction targets and policies necessary to achieve
Japan's 2050 carbon neutrality and the goals of the Paris Agreement.

-

J-POWER has established a system and structure to promote the transition
strategy at the management level.

-

J-POWER has made it clear that it will contribute to ESG and SDGs while
minimizing the negative impact (negative external effects) on society throughits business activities.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion-

CTF-2.

Based on the assessment of the Framework, the J-POWER BLUE MISSION
2050 and the Action Plan , DNV confirmed that they are well aligned with JPOWER s transition strategy. DNV confirmed that the implementation plan
based on the transition strategy is credible, ambitious, and achievable.
Business Model Environmental Materiality (Level of Importance)-

While J-POWER s initiatives for transition aim only to reduce emissions fromits own operations (Scope 1), they also include activities that contributedirectly and indirectly to Scope 2 and Scope 3 reductions. These areimportant initiatives in Japan's various decarbonisation plans and strategies
and contribute to the realisation of carbon neutrality on both the supply anddemand sides. In other words, J-POWER s initiatives for transition will directly
support the transition of the whole society, including J-POWER itself, as anenergy company taking on the challenge to achieve carbon neutrality by
2050.

-

J-POWER s roadmap has reached a level that is consistent with The Sixth
Strategic Energy Plan and the Transition Roadmap for Power Sector
formulated by the Agency for Natural Resources and Energy in terms ofdomestic initiatives. Their specific action plans and goals are set andquantified in absolute terms that they must enable optimal solutions andfurther improvements.

-

DNV confirmed that J-POWER s plan to implement its transition strategy isclosely linked to the activities of its core businesses and to the activities that
contribute to the reduction of CO2 in the whole society, thus contributing tothe overall environment and supporting J-POWER to advance its businesses.
J-POWER s planned transition strategy and transition pathways are associatedwith the issues that J-POWER has identified as materiality by utilizing
standards such as ISO26000 and the GRI standards*3 and will contribute to asignificant environmental benefit (impact) from both qualitative andquantitative perspectives.
*3: An international standard providing ESG-related reporting, management and analysis
methods established by Global Reporting Initiative.

CTF-3. Climate Transition Strategy to be Science-based including Targets andPathways-

For Scope 1 which relates to the domestic power generation business thatemits the largest amount of CO2 in the J-POWER group, J-POWER has set ascience-based transition plan that aligns with the Paris Agreement and atransition trajectory that aligns with the goals of the Agency for Natural
Resources and Energy.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion-

DNV confirmed that J-POWER s transition strategy was quantified as an
absolute value or the share based on a consistent measurement method
based on prescribed assumptions.

-

DNV confirmed that J-POWER s transition strategy was established withmedium-term goals (FY2030) and long-term goals (2050), which are alignedwith the goals of the Agency for Natural Resources and Energy, as
milestones.
Item
J-POWER Groupdomestic power
generation business
CO2 emissions
Renewable energy(hydro, wind,geothermal, solar)

CTF-4.
--

Target value
Target for FY2025: Reduction of 9.2 million tons*
Target for FY2030: Reduction of 46%/22.5 million tons**Compared to FY2013

Target for 2050: Net zero emissions
Target for FY2025: New development of 1,500 MW or moreglobally (compared to FY2017) and increase in hydroelectric power
generation by 300 million kWh/year (compared to FY2017)

Implementation Transparency
DNV confirmed that the investment and deployment plans related to JPOWER s transition strategy include consensus on future investments andexpenditures. As a specific example, DNV confirmed that J-POWER has
developed an investment plan for the four years (FY2022-FY2025) for theeleven green/transition eligibility criteria, including candidate projects forwhich the proceeds are to be used. J-POWER has announced that it will
invest approximately 700 billion yen in FY2023-FY2030 in renewable energy
development, etc. DNV confirmed that J-POWER plans to consider disclosing
the overall investment plan (investment amount) to the extent practicable,from the perspective of ensuring transparency.
DNV also reviewed the Framework as well as the J-POWER BLUE MISSION
2050 and confirmed high transparency in their implementation. In addition,
DNV received an explanation from J-POWER on the validity of theirimplementation and confirmed that there is a consensus for implementation.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion(2) Findings and DNV s opinions against the Four Common Elements of
GBP/GBGLs and GLP/GLGLs*The four elements are the criteria for green finance and transition finance in the format of Use ofProceeds instruments and the term Green Bonds in some parts below can be read as transition
finance instruments (bonds and loans).

GBP/GLP-1.

Use of Proceeds

J-POWER has defined the eligibility criteria for the use of proceeds as green/transition
projects which are consistent with the transition strategy and meet the requirements of
the related frameworks (CTFH/CTFBG, GBP/GBGLs and GLP/GLGLs).
Table-6 shows the eligibility criteria categories for the Transition Finance.
Table-6: J-POWER Green/Transition Finance Eligibility Criteria
Action Plan Items

Eligibility Criteria

Green*1 Transition*2

Upcycling (adding gasifiers to existing○

facilities)
CO2 freehydrogenHydrogen power
generationenergy(CO2 free hydrogen)power
generation

network

CO2 Free Hydrogen Production Facilities

Renewable energy

Hydro, wind, geothermal and solar power

Nuclear power*

Ohma Nuclear Power Plant

Stabilisation

Distributed Energy Services
Expansion of facilities such as frequency

Power
Enhancement○

capture equipment to existing facilities)
CO2 Free Hydrogen Generation Facilities

Fuel production

CO2 freeUpcycling (adding CO2 separation and

○

○

○

○

○

○
○

○

○
○

converter stations
Network enhancement to accommodate○

renewable energy
Shutdown and decommission ofDomestic coal-fired thermal power○

deteriorated/aged thermal power plants
Facilities for mixed/dedicated combustion for○biomass and ammonia*1 Projects that have been identified as eligible as green projects can be incorporated as green projects when
implementing green finance in the future. Green projects are also allowed in the CTFBG to be incorporated as partof transition finance implementation.
*2 Some of the projects currently classified as transition projects may become green projects by the application oftechnological innovations in the future (e.g. application of green fuel/manufacturing process and achievement of
CO2 emission standards that meets the criteria for green projects). The eligibility criteria with 〇 for both green
and transition are classified as either or both depending on the individual project.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

DNV has confirmed that J-POWER plans to allocate all the net proceeds from theGreen/Transition Finance to finance new expenditures or refinancing existing
expenditures such as capital expenditures, operating and administrative expenses,
equity investments, R&D related expenses, demolition expenses or other related
expenditures of eligible green/transition projects which are consistent with J-POWER's
investment plan for implementation of its transition strategy.
These are projects that directly or indirectly support projects that would result insignificant greenhouse gas reductions as exemplified by CTFH/CTFBG, GBP/GBGLs,
and GLP/GLGLs, projects that aims to achieve carbon neutrality that contribute tobusiness transformation, and projects that align with the Transition Roadmap forPower Sector by the Agency for Natural Resources and Energy and contribute toachieving its goals. These projects are expected to contribute to the SDGs because
they have been evaluated as meeting the criteria required for green/transition
projects and as having a clear environmental benefit that contributes to the transition
strategy. These processes are consistent with GBP/GLP-1.

GBP/GLP-2.

Process for Project Evaluation and Selection

J-POWER confirms that its green/transition projects are projects which meet the criteria
required for a green/transition project and contribute to the achievement of its transition
strategy. In addition, J-POWER confirms that it will work on the items shown below to
reduce the environmental and social risks identified in advance in the Framework. (Pleasesee <Reduction of Environmental and Social Risks> below.) Specifically, it is confirmedthat the projects are evaluated and selected by the Finance Department and the relevant
departments of the Fundraiser through the appropriate prescribed process.
These processes have been established in internal documents of J-POWER and DNV has
confirmed that the plan will be implemented in accordance with the appropriate
processes.
DNV also confirmed that the green/transition projects implemented by J-POWER are
consistent with Response to climate change which is one of the Fundraiser s materiality
and "Addressing Climate Change" in the Environmental Basic Policy of the J-POWERGroup, and that they are aligned with the transition strategy, goals, and pathways as
well.
<Reduction of Environmental and Social Risks><Environmental Impact Assessment>
J-POWER will conduct an environmental impact assessment (environmental
assessment) prior to the new construction or expansion of power plants in accordancewith relevant laws and regulations. J-POWER will take appropriate environmental
conservation measures based on the opinions of local residents, continue monitoring
after the start of plant operation in accordance with the agreements, such asenvironmental conservation agreements, entered into with related local governments,
and will confirm the effectiveness of the environmental conservation measures it has
taken.

Page 29 of 65

J-POWER Group Green/Transition Finance Framework Second Party Opinion<Preservation of Aquatic Environments>"Preservation of aquatic environments" has been designated as one of J-POWER Group
Environmental Targets. At each business site, J-POWER works to preserve aquatic
environments based on the specific regional environments by undertaking
environmental preservation measures for surrounding rivers and seas and by
conducting drills assuming incidents such as oil leaks. In addition, near hydroelectric
power stations, J-POWER takes measures concerning water quality and theaccumulation of silt in dam lakes and downstream areas, while near thermal power
stations, J-POWER manages effluent emitted into nearby seas in accordance withapplicable laws and regulations.
＜Preservation of Biodiversity>
At the planning and design stages of power generation facilities, based on the findingsof the environmental impact assessment, J-POWER will take environmental
preservation measures in consideration of the impact on the habitat and growthenvironment and ecosystems of animals and plants in the surrounding area. In
addition, at its power plants that are in operation, J-POWER will work on thepreservation of habitats of animals and plants including rare species that inhabit andgrow in the surrounding area.

Evaluation and Selection⊠⊠

The project is consistent with the

The project is evaluated and selected

Fundraiser s achievement of

based on a documented process showing

environmental contribution goals

that the project fit into the definedeligibility categories⊠

The project is eligible for the use of⊠

The project is evaluated and selected

proceeds from green finance and thebased on a documented process showing

transparency is ensured.

that potential ESG risks associated withproject implementation are identified andmanaged.

⊠The project is evaluated and selected☐

Other (Please specify):

based on the gist of published standard
summary (green projects for whichreferenceable criteria exist)

Information and Responsibilities and Accountability⊠

Evaluation/selection criteria based on⊠

external advice or verification☐

Other (please specify):

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Internal assessment

J-POWER Group Green/Transition Finance Framework Second Party Opinion

GBP/GLP-3.

Management of Proceeds

DNV confirmed how J-POWER will track and manage proceeds during the period frombond issuance to redemption. With respect to the proceeds from the Green/Transition
Finance, based on J-POWER s internal control procedures, the Finance Department will
manage the expenditure for eligible projects and track the allocated and unallocatedamounts of the proceeds by using the fund management code assigned to each projectusing the internal system and forms such as the proceeds management table. The total
amount of eligible projects will be managed so that it does not fall below the proceedsfrom the Green/Transition Finance. Unallocated proceeds, if any, will be managed in cash
or cash equivalents.
Tracking and Management of Proceeds:⊠

Some or all the proceeds from green finance that are planned to be allocated are systematicallydistinguished or tracked by the Fundraiser.

☐

The type and schedule of temporary investment of unallocated proceeds are disclosed.

⊠

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

Additional Disclosure Information:☐

Allocation to new investments only⊠

Allocation to both existing and new⊠

Allocation to individual (project)☐

Allocation to a portfolio of disbursements☐

Other (please specify):

investments
disbursements☐

Disclosure of portfolio balance of
unallocated proceeds

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

GBP/GLP-4.

ReportingWithin the scope of confidentiality obligations and so far as is reasonably practicable, DNV
confirmed that J-POWER plans to disclose annually in its Integrated Report, on its website,or disclose to the lenders (in the case of loans) about the allocation status of the proceeds
and the details of environmental benefits set forth by J-POWER until the full amount of
the proceeds from the Green/Transition Finance is allocated. In addition, DNV confirmedthat J-POWER plans to disclose any material changes in the allocation status or impacts in
its Integrated Report or on its website or disclose to the lenders (in the case of loans) until
the completion of the redemption or repayment.
<Reporting on Allocation Status>
 Amount of allocated proceeds
 Balance of unallocated proceeds
 Approximate amount (or the share) of the proceeds allocated to refinancing<Environmental Benefits: Impact Reporting> Project outline and its progress
 Amount of CO2 emission reduction (t-CO2 /y) (t/year)*Any or all the indicators above will be disclosed.
*The amount of CO2 emission reduction is calculated by multiplying the theoreticalvalue of the amount of electric power generated through eligible projects (installedcapacity x 24 hours x 365 days x estimated facility utilisation rate) by the CO2
emissions factors published by Japan Electric Power Exchange.

Reporting on Allocation Status☐

On a project-by-project basis⊠

On a project portfolio basis☐

On an individual related bond basis☐

Other (please specify):☐

Share of total investment amount allocated byInformation Reported:⊠☐

Amount of allocated proceeds

proceeds from Green Finance
Other (please specify):

Frequency:⊠

Annual☐Other (please specify):☐

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Semi-annual

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Impact Reporting (Environmental Benefits):☐

On a project-by-project basis⊠

On a project portfolio basis☐

On an individual related bond basis☐

Other (please specify):

Frequency:⊠

Annual☐Other (please specify):☐

Semi-annual

Information Reported (Expected/Post-funding Impact):⊠

GHG emissions/reduction☐⊠

Other ESG evaluation items (please

Energy reduction

Project outline, project progress

specify):

Means of Disclosure⊠

Included in the financial report (integrated☐

Included in the sustainability report⊠

Other (specify): disclosed on website

report)☐Included in the extraordinary report☐

Included in the reviewed report (please specify the report items subject to external review).

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J-POWER Group Green/Transition Finance Framework Second Party Opinion(3)

Findings and DNV s Opinion against Five Requirements*1＊1：including SLBGLs/SLLGLs

SLBP/SLLP-1

Selection of Key Performance Indicators (KPIs)-

DNV reviewed J-POWER s KPIs related to sustainability and confirmed that the
selected KPIs are material and relevant to J-POWER s core transition strategy
and sustainability management.

-

One KPI (Reduction of CO2 emissions (domestic power generation business))for environmental sustainability (transition) set by J-POWER shown in the
Table-2: KPIs and SPTs for J-POWER s Transition-Linked Finance is an
important indicator in the overarching transition (sustainability) strategy
towards J-POWER "BLUE MISSION 2050" set forth by J-POWER as an energy
company.

-

An important KPI for J-POWER is the reduction of CO2 emissions towards the JPOWER "BLUE MISSION 2050". As approximately 80% of GHG emissions are
Scope 1 emissions, it is appropriate enough for J-POWER to choose reductionof CO2 emission in domestic power generation business as a KPI. This ispositioned as a core KPI for expansion of CO2 free power sources , CO2 freehydrogen energy and zero-emission power sources and power network as
set forth in the J-POWER "BLUE MISSION 2050".

-

DNV confirmed that the KPI selected by J-POWER are consistent with The
Sixth Strategic Energy Plan and the Transition Roadmap for Power Sector
formulated by the Agency for Natural Resources and Energy, and that the KPIs
are appropriately set as comparable indicators.

-

From the perspective of business strategies of J-POWER as an energy
company, J-POWER works on to address the KPIs closely related to expansionof CO2 free power sources , CO2 free hydrogen energy and zero-emission
power sources and power network set forth in J-POWER BLUE MISSION
2050 towards realisation of carbon neutrality. DNV believes that suchinitiatives will contribute to J-POWER s aim to improve corporate value by
taking on the challenge of transitioning based on various approaches toachieve carbon neutrality aiming at the decarbonisation of the energy supply .
In addition, DNV believes that the KPIs will contribute to the realisation of the
J-POWER BLUE MISSION 2050 and simultaneous pursuit of goals related tosustainability management and J-POWER s business strategies.

-

DNV concludes that the reduction of CO2 emissions as a KPI is measurable
based on a consistent methodology (GHG Protocol), externally verifiable andcan be benchmarked against external references. DNV concludes that supply
chain GHG emissions are a robust and reliable indicator.

-

The Sixth Strategic Energy Plan formulated by the Agency for Natural
Resources and Energy states that domestic GHG emissions shall be reduced by
46% by FY2030 compared to the base year of FY 2013 towards achieving

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

carbon neutrality by 2050. These GHG emission reduction targets can be used
as external references to assess the ambition of J-POWER because, thesubstantive contribution to reducing CO2 emissions is consistent with theambitious target of 46% set forth in The Sixth Strategic Energy Plan .
-DNV confirmed that the KPI selected by J-POWER provide a clear scope ofassessment and calculation methodology. Please see Schedule-2 for details.

List of Selected KPIs
List of Selected KPIs
 KPI1：Reduction of CO2 emissions(domestic power generation business)

Definition, Scope and Parameters⊠

Clear definition of each selected KPI☐

Other (Please specify):⊠

Clear calculation methodology

Relevance, Robustness and Reliability of the Selected KPIs⊠

Demonstrated that the selected KPIs are⊠

relevant, core and material to the

Evidence that the KPIs are externallyverifiable

fundraiser s sustainability and businessstrategy⊠

Demonstrated that KPIs are measurable⊠

Evidence that the KPIs can be benchmarked☐

Other (Please specify):or quantifiable on a consistentmethodological basis

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

SLBP/SLLP-2

Calibration of Sustainability Performance Targets (SPTs)-

DNV confirmed that the substantive contribution of J-POWER to the reduction of
CO2 emissions is consistent with the ambitious target of 46% set in The Sixth
Strategic Energy Plan , based on the perspective that the SPTs shown in Table-2
support the reduction of CO2 emissions set in Expansion of CO2 free powersources , CO2 free hydrogen energy and zero emissions of power sources andPower network set forth in J-POWER Blue MISSION 2050 . DNV also
confirmed that there is a more concrete plan internally and these SPTs areambitious, realistic and meaningful. In addition, DNV confirmed that theachievement of SPTs is consistent with J-POWER s initiatives towards therealisation of carbon neutrality.

-

Based on the J-POWER BLUE MISSION 2050 and information provided by JPOWER to DNV, DNV has concluded that the SPTs are realistic, the plan is
feasible, and the SPT targets outlined in the Framework are likely to be met.

-

Regarding the targets set by J-POWER to reduce CO2 emissions (domestic power
generation business) by 9.2 million tons by FY2025 (SPT1) and by 46%/22.5
million tons by FY2030 (SPT2) compared to the actual emission for FY2013, thesubstantive contribution to reducing CO2 emissions is consistent with theambitious target of 46% set in The Sixth Strategic Energy Plan .

-DNV confirmed that the SPTs set by J-Power are linked to the improvement of
KPIs. J-POWER s efforts to achieve KPIs/SPTs are expected to be the driving
force behind the implementation of J-POWER s the transition (sustainability)
strategy.

-

DNV confirmed that the process to set the SPTs is based on an appropriate
combination of benchmarking approaches.
The Framework provides the process for the target setting up toFY2030 as a guideline, with KPI information based on appropriate data
based on J-POWER s actual emission for FY2013.



Regarding the outlined SPTs, the substantive contribution to reducing
CO2 emissions is at the level that is consistent with the ambitious
target of 46% set forth in The Sixth Strategic Energy Plan , which isconsistent with the method calculated from the GHG emission
reduction protocol used by the Agency for Natural Resources andEnergy.

In addition, the SPT target setting is evaluated as ambitious as an item
closely related to GHG emission reduction, based on the most recent
performance level of J-POWER.

DNV concludes that the SPTs are appropriately linked to the GHG
emission reduction targets set by the Agency for Natural Resources
and Energy. The Framework should also be consistent with nationalguidelines which are consistent with the goals of the Paris Agreement.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

J-POWER will be supported by KPIs/SPTs and respective action plans
for the realisation of J-POWER BLUE MISSION 2050 which include
targets set by the Agency for Natural Resources and Energy, Best
Available Technology, or other similar technologies.
--

DNV confirmed that SPT target setting has been adequately disclosed as follows.


The timeline for achieving the SPT is set up until FY2030. For theinterim process leading up to the determination of the trigger event,the SPTs have been set based on SPTs calculated by linear
interpolation between the actual emission for the base year of FY2013
and targets by FY2030.

The base year for the SPTs concerning the reduction of CO2 emissions
is the actual emission for FY2013, which is consistent with the baseyear (2013) set by the Agency for Natural Resources and Energy.

Through the Framework, Action Plan and Roadmap towards carbon
neutrality by 2050, the progress of the CO2 emission reduction has
been detailed in terms of how it will be achieved.

DNV confirmed the validity of the fact that the following SPTs are not set every
year, due to the fact that the amount of electricity generated by power supply
development fluctuates according to the electricity supply and demandsituation, and that it is necessary to implement initiatives with due
consideration from the perspective of ensuring electricity supply capacity.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Table-2(Reposted): J-POWER Transition-Linked Finance KPIs and SPTs
(One or more of the following KPIs and SPTs are selected for specific transition-linked finance).
KPIs

SPTs

KPI 1: Reduction of CO2 emissions

SPT1: Reduction of 9.2 million tons in FY2025 (compared to the(J-POWER Group domestic power

performance for FY2013)

generation business)

SPT2: Reduction of 46%/22.5 million tons by FY2030 (compared to theperformance for FY2013)

Description of KPIs
The KPIs are set with items that areclosely related to J-POWER s
Medium-Term Management Plan.
KPI 1: Reduction of CO2 emissions
This is a core KPI for Expansionof CO2 free power sources , CO2
free hydrogen energy and zero
emissions of power sources andPower network on the supply
side of J-POWER and it isquantifiable and continuously
measurable based on the GHG
Protocol.

Description of SPTs
Each SPT refers to the target figures in the roadmap, and the figures
are linked to the transition strategy of J-POWER.
SPT1: CO2 emission reduction amount
SPT2: CO2 emission reduction amount and CO2 emission reduction rate
The substantive contribution to CO2 emission reduction is consistent
with the ambitious target of 46% set forth in The Sixth Strategic
Energy Plan and it can be evaluated that its future contribution toCO2 emission reduction will exceed Business as Usual and that it isconsistent with the ambitious national target.
The SPT trigger events may be set by linear interpolation between
the actual emission for the base year of FY2013 and targets by
FY2025 and/or FY2030, or may be set individually when futuredetailed plans are drawn up.

(SPTs ) Rationale and level of ambition⊠

Evidence that the SPTs represent a⊠material improvement⊠

Demonstrated relevance and reliability of
selected benchmarks and standards

Evidence that SPTs are consistent with⊠

the Fundraiser s sustainability and

Demonstrated SPTs have been set in apredefined timeline

business strategy☐

Other (Please specify):

Benchmarking approach⊠

Fundraiser s own performance⊠Fundraiser s industry peers⊠

Reference to scientific evidence⊠

Other (Please specify)：GHG emission
reduction targets set by the Agency for Natural
Resources and Energy

Additional disclosure⊠

Explanation of possible recalculations or⊠

adjustments⊠

Explanation of the Fundraiser s strategy forachievement

Identification of key factors that may☐

Other (Please specify);

affect the achievement of SPTs

SLBP/SLLP-3

Bond/Loan Characteristics

Regarding the Transition-Linked Finance (Bond or Loan) executed under the Framework,

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

DNV confirmed that the observation timing of specific SPTs and the trigger events withperformance requirements and the extent of their impact would be linked to theachievement of targets and interest rates of bonds, terms and conditions of loan orother financial incentives (such as donations to organisations that engage in activities
closely related to the set KPIs).
-

DNV confirmed that J-POWER considered the appropriate fallback mechanisms
and, as a result, decided not to set up another SPT or calculation method at thistime since the risks of not being able to calculate or observe were extremely
small.

-J-POWER has explained that changes may be made to KPIs and SPTs after
discussion at internal meetings when there are reasonable grounds, such aschanges in business environment, business structure, KPIs, etc., regardless ofwhether such events are due to external factors or the result of J-POWER smanagement decision.

-

J-POWER confirmed that it intends to disclose any changes to KPIs and SPTs inloan agreement documents.

-

J-POWER explained that changes in the characteristics of the bond/loan may beforegone if there are reasonable grounds for a temporary non-achievement of
the SPT due to transient changes in domestic electricity supply capacity.

Financial impact⊠

Variation in interest rates⊠

Other (Please specify)：Financial incentives such as donations

Structural characteristics⊠

Other (Please specify)：The conditions for trigger event determination (determination
date and SPTs) will be set according to the term of each bond or loan and will be specified
in legal disclosure documents (or other methods of public disclosure) or contract
documents.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

SLBP/SLLP-4-

Reporting

DNV confirmed that the necessary information will be disclosed to the public in atimely manner for the following details required by the SLBP/SLLP.


KPIs performance against SPTs will be verified by an external agency atleast once a year until the completion of redemption or repayment after
the execution of Transition-Linked Finance and disclosed in the Integrated
Report or on the website or disclosed to the lenders (in the case of loan
only).



SPTs achievement status will be verified annually by an independent thirdparty organisation and used for determination of the financial
characteristics (such as bond interest rate and terms and conditions ofloan) or other financial incentives.



If the targets set by the Agency for Natural Resources and Energy werechanged, the level of ambition for J-POWER s SPTs may be changed after
discussions with DNV, if necessary.

Information reported⊠

Performance of the selected KPIs⊠

Verification assurance report⊠

Level of ambition of the SPTs⊠

Other (Please specify)：Other (please
specify): Information on the financial
impact when implementing trigger event
determination (information of interest
rate and donation). Validity of theadjustment and recalculation result of
KPIs and SPTs, if necessary.

Frequency⊠

Annual☐Other (Please specify)☐

Semi-annual☐

Information published in sustainability

Means of disclosure☐

Information published in financial
report☐⊠Information published in ad hoc
documents☐

reportOther (Please specify)：disclosed on
fundraiser s website or to the lender (inthe case of loan only)

Reporting externally reviewed

Level of assurance on reporting⊠☐

Limited assurance☐

Page 40 of 65

Reasonable assurance
Other (Please specify)：

J-POWER Group Green/Transition Finance Framework Second Party Opinion

SLBP/SLLP-5-

Verification

DNV confirmed that J-POWER planned to undergo independent verification of
KPI-related data at least once a year by qualified external assessment agency.

Information reported⊠

Limited assurance☐

Reasonable assurance☐

Other (Please specify)：☐

Semi-annual☐

KPI methodology

Frequency⊠

Annual☐Other (Please specify)

Material changes⊠

Perimeter☐

SPTs calibration

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

VII. Assessment Conclusion
On the basis of the information provided by J-POWER and the work undertaken, it is
DNV s opinion that the J-POWER Group Green/Transition Finance Framework meets therequirements established in the Protocol and that, with CTFH/CTFBG, GBP/GBGLs,
GLP/GLGLs, SLBP/SLBGLs and SLLP/SLLGLs as the criteria for expressing our opinion, it
is aligned with the following definitions and purposes of green/transition finance andtransition-linked finance that specify the use of proceeds.
-

Enable capital-raising and investment for new or existing projects withenvironmental benefits-

Provide an investment opportunity necessary for climate transition finance to be
executed with transparency and credibility.

-

Through KPIs and SPTs, encourage the achievement of the fundraiser s ESG(regarding climate transition) that are material (for climate transition),quantifiable, predetermined, ambitious, regularly monitored, and externallyverifiable.

DNV Business Assurance Japan K.K.
13 July 2023

Mark Robinson

Naoki Maeda

Manager, Sustainability Services

Managing Director

DNV Business Assurance, Australia

DNV Business Assurance Japan K.K.

Masato Kanedome

Yasuaki Miyamoto

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

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J-POWER Group Green/Transition 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 Fundraiser and the Second-Party Opinion Providers, DNV: The management ofFundraiser 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 Fundraiser 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 have relied on the information and the facts presented to us by the Fundraiser. DNV is not responsible forany aspect of the nominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, orconclusions are incorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Fundraiser s
management and used as a basis for this assessment were not correct or complete.

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J-POWER グループ グリーン/トランジション・ファイナンス・フレームワーク セカンド・パーティ・オピニオン

Schedule-1 Green/Transition Finance Project Candidate List
The projects listed in the table are the candidate projects that have been evaluated for eligibility at the time of pre-issue eligibility assessment (asof June 2023). In the future, for green/transition finance instruments issued under the J-POWER Green/Transition Finance Framework, one ormore of the eligible criteria (candidate eligible projects) listed in Schedule-1 will be selected, and the use of the proceeds will be reported in a prefinancing or post-financing report. If additional green/transition projects are included, the eligibility of such projects will be evaluated in advanceby J-POWER in accordance with the process based on the Framework and, if necessary, DNV will evaluate them in a timely manner.
Action Plan Items

CO2 freehydrogen energy

CO2 free power
generation

Power network

Hydrogen power
generation

Eligibility Criteria

Green*1

Transition*2

Upcycling (adding gasifiers to existing facilities)○

Upcycling (adding CO2 separation and capture equipment to existing facilities)○

CO2 Free Hydrogen Generation Facilities○○

Fuel production(CO2 free hydrogen)

CO2 Free Hydrogen Production Facilities○○

Renewable energy

Hydro, wind, geothermal and solar power○○

Nuclear power

Ohma Nuclear Power Plant

Stabilisation

Distributed Energy Services

Enhancement

Domestic coal-fired thermal power○○○

Expansion of facilities such as frequency converter stations○

Network enhancement to accommodate renewable energy○

Shutdown and decommission of deteriorated/aged thermal power plants○

Facilities for mixed/dedicated combustion for biomass and ammonia○*1 Projects that have been identified as eligible as green projects can be incorporated as green projects when implementing green finance in the future.
Green projects are also allowed in the CTFBG to be incorporated as part of transition finance implementation.
*2 Some of the projects currently classified as transition projects may become green projects by the application of technological innovations in the future(e.g. application of green fuel/manufacturing process and achievement of CO2 emission standards that meets the criteria for green projects). The eligibility
criteria with 〇 for both green and transition are classified as either or both depending on the individual project.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

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

KPI1：Reduction of CO2 emissions (J-POWERGroup domestic power generation business)

Description
J-POWER has selected Reduction of CO2 emissions (J-POWER Group domestic power generation
business) as a KPI. The selected KPI are set with items that are closely related to the materiality of
J-POWER.
KPI1 is a core KPI for J-POWER s Expansion of CO2 free power sources , CO2 free hydrogenenergy and zero emissions of power sources and Power network on the supply side and it isquantifiable and continuously measurable based on the GHG Protocol.

SPTs Sustainability Performance Targets
SPTs
SPT1：
Reduction of 9.2 million tons in FY2025*
SPT2：
Reduction of 46%/22.5 million tons* in
FY2030*Compared to the performance for FY2013

Description
Each SPT refers to the target figures in the Roadmap, and the figures are linked to the transition
strategy of J-POWER.
Regarding SPT1(reduction amount of CO2 emissions) and SPT2(reduction amount of CO2 emissions
and reduction rate of CO2 emissions), the substantive contribution to CO2 emission reduction isconsistent with the ambitious target of 46% set forth in The Sixth Strategic Energy Plan and it canbe evaluated that its future contribution to CO2 emission reduction will exceed Business as Usualand that it is consistent with the ambitious national target.
The SPT trigger events may be set by linear interpolation between the actual emission for the baseyear of FY2013 and targets by FY2025 and/or FY2030, or may be set individually when futuredetailed plans are drawn up.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Schedule-3 Green/Transition Finance Framework Eligibility Assessment Protocol
The following checklists (1 through 4) are the DNV assessment protocol created for the eligibility assessment of the Use of Proceeds Green/Transition Finance under
the J-POWER Green/Transition Finance Framework based on the disclosure requirements of the CTFH and CTFBG.
The Confirmed documents in Work Undertaken column include public or non-public documents (internal document of the Issuer) and are provided to DNV by JPOWER as evidence for determining the eligibility.
*In the following disclosure requirements and other items, the terms issuer and investor may be read as borrower and lender respectively, as appropriate.
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1

Issuer s
ClimateTransition
Strategy andGovernance

The financing purpose should be for enabling
an issuer s climate change strategy. A
transition label applied to a debt financing
instrument should serve to communicate theimplementation of an issuer s corporate
strategy to transform the business model in a
way which effectively addresses climaterelated risks and contributes to alignment
with the goals of the Paris Agreement.

Confirmed documents:- Framework- The Sixth Strategic
Energy Plan
- Transition Roadmap
for Power Sector- J-POWER Group
Integrated Report
2022- J-POWER Group ESG
Data Collection- J-POWER BLUEMISSION 2050
- Project List

J-POWER has established its Framework and has also introduced
various plans and initiatives to manage and enhance the organisation senvironmental sustainability and related performance in line with JPOWER s wide range of environmental strategies.

<Suggested information and indicators>
 A long-term target to align with the goalsof the Paris Agreement (e.g., theobjective of limiting global warming
ideally to 1.5℃ and, at the very least, towell below 2℃);
 Relevant interim targets on the trajectory
towards the long-term goal; Disclosure on the issuer s levers towards
decarbonisation, and strategic planningtowards a long-term target to align withthe goals of the Paris Agreement; Clear oversight and governance oftransition strategy; and,
 Evidence of a broader sustainability
strategy to mitigate relevantInterviews with theIssuerBased on the J-POWER BLUE MISSION 2050 which is a sciencebased long-term goal quantified by J-POWER, DNV conducted a review
and confirmed that achieving J-POWER s goals regarding the scope of
its target (Scope 1 of the domestic power generation business) is
equivalent to achieving the goals set forth in the Paris Agreement.
Based on risk and opportunity identification and scenario analysis
using the TCFD guidance, J-POWER has set environmental corporate
strategies that are important to its business model.
In February 2021, J-POWER formulated the J-POWER BLUE MISSION
2050 and set forth a roadmap to achieve carbon neutrality(hereinafter referred to as J-POWER Roadmap ). In J-POWER BLUEMISSION 2050 , J-POWER sets a long-term goal of carbon neutrality
by 2050 which is aligned with the goal of the Paris Agreement andestablishes medium-term goals for achieving it. With the J-POWER
Roadmap, J-POWER discloses a strategic plan to achieve the transition
to carbon neutrality.
Specifically, J-POWER s Transition Strategy incorporates the reduction
targets and policies necessary to achieve Japan s carbon neutrality by
2050 and the goals of the Paris Agreement. J-POWER reviewed its
initiatives in May 2023 and raised CO2 emission reduction targets.
Furthermore, if the need arises to revise its initiatives to realise

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

environmental and social externalities
and contribute to the UN Sustainable
Development Goals.

DNV Findings
continuous future emission reduction, J-POWER plans to makeappropriate revisions in light of the progress in the development ofeach technology and according to the timeline.
J-POWER considers the response to climate change including theimplementation of transition strategy to be one of its most importantmanagement issues, and has established a system and structure topromote at the management level the initiatives set forth in the JPOWER BLUE MISSION 2050 and in J-POWER Roadmap.
On the basis of the evaluation of the implementation plans provided by
J-POWER based on the Framework, the J-POWER BLUE MISSION
2050 and the J-POWER Roadmap, DNV confirmed that they are wellaligned with J-POWER s transition strategy. Through the evaluation,
DNV confirmed that the implementation plans based on the transition
strategy are credible, ambitious, and achievable.

2

Business model
environmental
materiality

The planned climate transition trajectoryshould be relevant to the environmentallymaterial parts of the issuer s business model,
taking into account potential future scenarios
which may impact on current determinations
concerning materiality.

Confirmed documents:- Framework- The Sixth Strategic
Energy Plan
- Transition Roadmap
for Power Sector- J-POWER Group
Integrated Report
2022- J-POWER Group ESG
Data Collection- J-POWER BLUEMISSION 2050
- Project List
Interviews with theIssuerPage 47 of 65

DNV assessed whether the key activities related to J-POWER sbusiness corresponded to the contribution to the environment and JPOWER s transition strategy which was evaluated.
The greenhouse gas emissions of the J-POWER Group (FY2019FY2021) are as follows.
Item

FY2019FY2020

FY2021

Scope153.97 million t-CO2

53.58 million t-CO2

47.95 million t-CO2

Scope20.11 million t-CO2

0.13 million t-CO2

0.14 million t-CO2

Scope322.22 million t-CO2

15.27 million t-CO2

13.60 million t-CO2

Total

76.31 million t-CO2

68.98 million t-CO2

61.68 million t-CO2

While J-POWER s initiatives for transition aim only to reduce emissions
from its own operations (Scope 1), they also include activities that
contribute directly and indirectly to Scope 2 and Scope 3 reductions.
These are important initiatives set forth in Japan s various
decarbonisation plans and strategies and contribute to the realisation

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findingsof carbon neutrality on the supply side. In other words, J-POWER sinitiatives for transition will directly support the transition of the wholesociety, including J-POWER itself, as an energy company taking on thechallenge to achieve carbon neutrality in 2050.
J-POWER s Roadmap has reached a level consistent with theTransition Roadmap for Power Sector formulated by the Agency for
Natural Resources and Energy; Their specific action plans and goals
are set and quantified in absolute terms that they must enable optimal
solutions and further improvements.
DNV confirmed that J-POWER s plan to implement its transition
strategy is closely linked to the activities of its core business and to theactivities that contribute to the reduction of CO2 in the whole society,thus contributing to the overall environment and supporting J-POWER
to advance its business. J-POWER s planned transition strategy andtransition pathways are associated with the materiality that J-POWER
has identified by utilizing standards such as ISO26000 and the GRI
standards*1 and will contribute to a significant environmental benefit(impact) from both qualitative and quantitative perspectives.
*1: Global Reporting Initiative (an international standard that provides ESGrelated reporting, management and analytical methods)

3

Climatetransition
strategy to bescience-based
includingtargets andpathways

Issuer s climate strategy should reference
science-based targets and transition
pathways. The planned transition trajectoryshould:••be quantitatively measurable (based ona measurement methodology which isconsistent over time);be aligned with, benchmarked orotherwise referenced to recognised,science-based trajectories where suchtrajectories exist;

Confirmed documents:- Framework- The Sixth Strategic
Energy Plan
- Transition Roadmap
for Power Sector- J-POWER Group
Integrated Report
2022- J-POWER Group ESG
Data Collection

Page 48 of 65

For Scope 1 which relates to the domestic power generation businessthat emits the largest amount of CO2 in the J-POWER group, J-POWER
has set a science-based transition plan that aligns with the Paris
Agreement and a transition trajectory that aligns with the goals set
forth by the Agency for Natural Resources and Energy.
This plan sets out realistic achievements and pathways for absolute
CO2 emission reduction and aims to reduce absolute (total) amount of
CO2 emissions to maintain defined emission levels in the future.
DNV confirmed that J-POWER s transition strategy was quantified as
an absolute value or the share based on a consistent measurement
method based on prescribed assumptions.

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements••

be publicly disclosed (ideally inmainstream financing filings), include
interim milestones, and;be supported by independent assurance
or verification

Work Undertaken-

J-POWER BLUEMISSION 2050
Project List

Interviews with theIssuerDNV Findings
Transition targets are set on a voluntary basis based on initiatives
utilizing TCFD, etc. for sustainable CO2 emission reduction. They arealso aligned with the policy of the Agency for Natural Resources andEnergy, which serves as a benchmark.
Specifically, J-POWER has established the following transition targets.

< Suggested information and indicators>
•

•
•
•
•

Item

Target value

J-POWER Group Target for FY2025: Reduction of 9.2 million tons*.

Short, medium, and long-term
greenhouse gas reduction targets
aligned with Paris Agreement;
Baseline
Scenario utilised, and methodology
applied (e.g. ACT, SBTi, etc.)
Greenhouse gas objectives covering all
scopes (Scope 1, 2 and 311); and,Targets formulated both in intensity andabsolute terms

domestic power Target for FY2030: Reduction of 46%/22.5 million tons*
generation
business*Compared to FY2013

Target for 2050: Net zero emissions

CO2 Emissions
Renewable

Target for FY2025: New development of 1,500 MW or moreenergy (hydro,

globally (compared to FY2017) and increase in hydroelectric

wind,

power generation by 300 million kWh/year (compared togeothermal,

FY2017)

solar)

While J-POWER s initiatives for transition aim only to reduce emissions
from its own operations (Scope 1), they also include activities that
contribute directly and indirectly to Scope 2 and Scope 3 reductions.
These are important initiatives set forth in Japan s various
decarbonisation plans and strategies and contribute to the realisationof carbon neutrality on the supply side. In other words, J-POWER sinitiatives for transition will directly support the transition of the wholesociety, including J-POWER itself, as an energy company taking on thechallenge to achieve carbon neutrality in 2050.
Transition initiatives and respective scope emissions are disclosed in
documents such as J-POWER Group Integrated Report and JPOWER Group ESG Data Collection .
4

Implementation Market communication in connection with theTransparency
offer of a financing instrument which has theConfirmed documents:- Framework

Page 49 of 65

DNV confirmed that the investment and deployment plans related to JPOWER s transition strategy include consensus on future investments

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements
aim of funding the issuer s climate transition
strategy should also provide transparency tothe extent practicable, of the underlying
investment program including capital andoperational expenditure. This may include
R&D-related expenditure where relevant, anddetails of where any such operating
expenditure is deemed non-Business as
Usual , as well as other relevant information
indicating how this program supports
implementation of the transition strategy,
including details of any divestments,
governance and process changes.
<Suggested information and indicators>
 Disclosure on the percentage ofassets/revenues/expenditures/divestmentsaligned to the various levers outlined in
Element 1 above; Capex roll-out plans consistent with theoverall strategy and climate science

Work Undertaken--

The Sixth Strategic
Energy Plan
Transition Roadmap
for Power Sector
J-POWER Group
Integrated Report
2022
J-POWER Group ESG
Data Collection
J-POWER BLUEMISSION 2050
Project List

Interviews with theIssuerDNV Findings
and expenditures. As a specific example, DNV confirmed that JPOWER has developed an investment plan for the four years (FY2022FY2025) for the eleven green/transition eligibility criteria, including
candidate projects for which the proceeds are to be used. J-POWER
has announced that it will invest approximately 700 billion yen in
FY2023-FY2030 in renewable energy development, etc. DNV
confirmed that J-POWER plans to consider disclosing the overall
investment plan (investment amount) to the extent practicable fromthe perspective of ensuring transparency. This includes projects to be
implemented with green/transition finance.
Regarding the overall future investment plan (investment amount),
DNV confirmed J-POWER s plan to make the investments required to
implement its transition strategy taking CTF-1 through CTF-3 into
account based on the internal control system and processes and inaccordance with an appropriate timeline.
DNV confirmed that J-POWER also plans to allocate the proceeds tocapital expenditures, operating and administrative expenses, equity
investments, R&D related expenses, demolition expenses or otherrelated expenditures of the eligible transition finance project
candidates listed in Schedule-1.

Page 50 of 65

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Schedule-4 Green Finance (or use of proceeds Transition finance) Eligibility Assessment Protocol
The following checklists (GBP/GLP-1 through GBP/GLP-4) are DNV assessment protocol created for the J-POWER Green/Transition Finance (use of proceeds
transition finance) Eligibility Assessment based on the requirements of GBP/GBGLs and GLP/GLGLs. Confirmed documents in the Work Undertaken column
includes internal documents of the Fundraiser provided to DNV by J-POWER as evidence for determining the eligibility.
Please note that, although the terms GBP or GLP are used in Schedule-3 in accordance with the practice, this schedule contains the criteria and requirements thatare referred to in the case of transition finance which specifies the use of proceeds, such as transition projects, based on CTFH and CTFBG. Therefore, the following
checklists should be read in the context of transition finance as appropriate.

GBP/GLP-1 Use of proceeds
Ref.

Criteria

Requirements

1aTypes of funds

The types of green/transition finance are
Confirmed documents:- Framework
classified into one of the following types definedby GBP.
Interviews with the (Standard) Green/transition Bond and Loan
Fundraiser
 Green/transition Revenue Bond and Loan
 Green/transition Project Bond and Loan OtherThrough the evaluation work, DNV confirmed that the Green/Transition
Finance falls into the following category:

The key to a green/transition bond is that theproceeds will be used for a green project,which should be properly stated in the legal
documents relating to the security.

DNV confirmed that the Green/Transition Finance aims to fund a wide
range of green/transition projects focused on J-POWER s environmental
goals and transition strategy, as described in the Framework and
Schedule-1.

1bTransition
Project
Classification

Work Undertaken

Confirmed documents:- Framework- Project List
- Amended Shelf
Registration
StatementInterviews with theFundraiser

Page 51 of 65

DNV Findings・ (Standard) Green/Transition Bond and Loan

Specifically, all the transition finance categories and J-POWER s
Green/Transition Finance project candidates listed in the table below
and Schedule-1 are evaluated as being consistent with the transition
strategy. J-POWER plans to allocate the proceeds from theGreen/Transition Finance to finance one or more of theGreen/Transition Finance project candidates. If a green/transition
project is selected prior to the execution of financing, this will be
disclosed in legal documents.

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Based on the assessment, DNV concludes that the Green/Transition
Finance project candidates will bring concrete and actual environmental
benefits.
Table: J-POWER Green/Transition Finance Eligibility Criteria
Action Plan Items

CO2 freehydrogenenergyCO2 freepower
generation

Power
network

Hydrogenpower
generation

Upcycling (adding CO2
separation and capture
equipment to existing
facilities)○

Fuel
production(CO2 freehydrogen)

CO2 Free Hydrogen
Production Facilities

RenewableenergyHydro, wind, geothermaland solar power

Nuclear power

Ohma Nuclear Power Plant

Stabilisation

Distributed Energy Services

Enhancement

Green Transition○

CO2 Free Hydrogen
Generation Facilities

Domestic coal-fired thermal
powerPage 52 of 65

Eligibility Criteria
Upcycling (adding gasifiers
to existing facilities)

○

○

○

○

○

○
○

○

○

Expansion of facilities suchas frequency converter
stations○

Network enhancement toaccommodate renewableenergy○Shutdown anddecommission ofdeteriorated/aged thermal
power plants○

Facilities formixed/dedicatedcombustion for biomass
and ammonia○

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1cEnvironmental
benefits

All green projects to which the funds are usedshould have clear environmental benefits, theeffects of which should be assessed by thefundraiser and, where possible, quantitatively
demonstrated.

Confirmed documents:- Framework- Project List

Green/transition projects are projects that contribute to the goals basedon J-POWER s Transition Strategy and to low carbon anddecarbonisation which fall into the eleven eligible criteria shown in 1b.
The environmental benefit is CO2 emission reduction, which has been
quantitatively or qualitatively evaluated by the Fundraiser.

Interviews with theFundraiser

DNV confirmed that the disclosure prior to the execution of theGreen/Transition Finance will cover the environmental benefit
evaluation method (calculation method) and that items of the project,
and the indicators set according to the characteristics of the project andthe amount of CO2 emission reduction will be quantitatively evaluatedand reported annually.
(If quantitative assessment of CO2 emission reduction is difficult due tothe characteristics of the project, information such as project outline
and status of R&D and demonstration will be reported to the extent
practicable.)
1d

Refinancing rate If all or part of the proceeds are used or may
be used for refinancing, the fundraiser will
indicate the estimated ratio of the initialinvestment to the refinancing and, if necessary.
Therefore, it is recommended to clarify whichinvestment or project portfolio is subject torefinancing.

Confirmed documents:- Framework- Project List
Interviews with theFundraiser

Page 53 of 65

J-POWER plans to use all proceeds for new investments, refinancing or
both for eligible project candidates included in Schedule-1. If J-POWER
is clear about whether it will use the proceeds for new investment or
refinancing prior to the financing, J-POWER will disclose the information
in a legal document. If undecided prior to financing, DNV confirmedthat J-POWER plans to disclose the amount (or the share) of theproceeds allocated to refinancing through the annual report.

J-POWER Group Green/Transition 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 fundraisers should
provide an overview of the process of qualifying
projects for which green/transition bondfunding will be used. This includes (but is not
limited to):Confirmed documents:

DNV confirmed that the Fundraiser has a process document for
determining the eligibility of the projects for which the proceeds fromthe Green/Transition Finance will be used and that it is clearly outlinedin the Framework.

-

Framework

Interviews with theFundraiser

 The process by which the fundraiser
determines that the project in question is
included in the business category of aqualified green project.
 Creation of criteria for eligibility of projects
for which green/transition bond funding will
be used Environmental sustainability goals
2b

Fundraiser s
Environmental
and Social
Governance
Framework

In addition to criteria and certifications, theinformation published by fundraisers regarding
the green/transition bond process also
considers the quality of performance of thefundraiser s framework and environmental
sustainability.

Confirmed documents:-

Framework

Interviews with theFundraiser

When selecting green/transition projects, the Fundraiser takes into
consideration that it complies with environment-related laws,
ordinances and regulations, and that the environmental benefits
improvement such as CO2 reduction are clear in the entire life cycle oreach process. In the operation and implementation of the project, eachof the departments involved is committed to the preservation of thesurrounding environment.
DNV has confirmed that the green/transition projects implemented by
the Fundraiser are consistent with the Fundraiser s management andenvironmental policies, as well as with the transition strategy, goals
and pathways.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

GBP/GLP-3 Management of Proceeds
Ref.

Criteria

3a

Tracking procedure-1

3b

3c

Tracking procedure-2

Temporary holding

Requirements

Work Undertaken

DNV Findings

The net proceeds from Green/transition
bonds should be managed in subaccounts, included in sub-portfolio, or
otherwise tracked. It should also be
certified by the fundraiser in a formalinternal process related to the fundraiser sinvestment and financing operations for
the Transition Project.

Confirmed documents:- Framework

DNV confirmed that the proceeds from the Green/Transition financecan be tracked by the Fundraiser s internal system and forms suchas the proceeds management table. Based on the review of theactual system and relevant documents in use, DNV confirmed thatthe management status of the proceeds will be proved.

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

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

Confirmed documents:- Framework

Interviews with theFundraiser

Interviews with theFundraiser

Interviews with theFundraiser

Page 55 of 65

DNV confirmed that, during the period from the execution of theGreen/Transition Finance to redemption, the Fundraiser plans toperiodically (quarterly) review the balance of the proceeds by using
the internal system and forms such as the proceeds management
table described in 3a.

DNV confirmed through the confirmation process based on theFundraiser s internal system, forms and related workflow that they
are designed to ensure that the balance of unallocated proceeds issequentially recognised. DNV confirmed through the description andverification of the framework that the balance of unallocatedproceeds is managed in cash or cash equivalents. DNV also
confirmed that the balance of unallocated funds will be disclosed
through reporting on the allocation status.

J-POWER Group Green/Transition 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 investment of
unallocated proceeds, the fundraiser willconsider each project at least once a year
for projects to which the Green/transitionbond proceeds have been allocated, taking
into account the following: A list of eachproject should be provided.

Confirmed documents:- Framework- Project list

DNV confirmed that the Fundraiser will annually report on theGreen/Transition Finance until the proceeds are fully allocated andwill disclose the allocation status, the projects to which the proceeds
have been allocated, or information on environmental benefits.
Regarding the environmental benefits, DNV confirmed that theFundraiser will disclose any or all of the following within the scope ofconfidentiality and to the extent reasonably practicable.

Interviews with theFundraiser

The report will be disclosed in the Integrated Report, on the website
or to the lenders (in the case of loans).

- Confidentiality and competitive
considerations- Outline of each project, expectedsustainable environmental and social
effects<Allocation Status>
 Amount of allocated proceeds
 Balance of unallocated proceeds
 Approximate amount (or the share) of proceeds allocatedto refinancing<Environmental Benefits> Project outline and its progress
 Amount of CO2 emission reduction (t-CO2 /y) (t/year)*Any or all the indicators above will be disclosed.
*The amount of CO2 emission reduction is calculated by multiplying thetheoretical value of the amount of electric power generated througheligible projects (installed capacity x 24 hours x 365 days x estimatedfacility utilisation rate) by the CO2 emission factors published by Japan
Electric Power Exchange.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

Schedule-5 Sustainability-Linked Finance Framework Eligibility Assessment Protocol
The checklist below (SLBP/SLLP-1 through 5) is DNV assessment protocol created for the eligibility assessment of the J-Power Group Green/Transition Finance
Framework based on the requirements of SLBP/SLLP.

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

Criteria

Requirements

Work Undertaken

DNV Findings

1a

KPI ‒ material to coresustainability andbusiness strategy

The fundraiser s sustainability performanceis 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 undermanagement s control. The KPI should beof high strategic significance to thefundraiser 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.

Confirmed documents:- Framework- J-POWER Group
Integrated Report
2022- J-POWER BLUEMISSION 2050

DNV reviewed J-POWER s KPIs related to sustainability and confirmedthat the selected KPIs are material and relevant to J-POWER s coretransition strategy and sustainability management.

Interviews with theFundraiser

J-POWER has upheld the J-POWER "BLUE MISSION 2050".
One KPI (Reduction of CO2 emissions (domestic power generation
business)) for environmental sustainability (transition) set by JPOWER shown is an important indicator in the overarching transition(sustainability) strategy of J-POWER as an energy company.
An important KPI for J-POWER is the reduction of CO2 emissions
towards the J-POWER "BLUE MISSION 2050". As approximately 80%
of GHG emissions are Scope 1 emissions, it is appropriate enough for
J-POWER to choose reduction of CO2 emission in domestic power
generation business as a KPI. This is positioned as a core KPI for
expansion of CO2 free power sources , CO2 free hydrogen energy
and zero-emission power sources and power network as set forthin the J-POWER "BLUE MISSION 2050".
DNV confirmed that the KPI selected by J-POWER are consistent withThe Sixth Strategic Energy Plan and the Transition Roadmap forPower Sector formulated by the Agency for Natural Resources andEnergy, and that the KPIs are appropriately set as comparable
indicators.
From the perspective of business strategies of J-POWER as an energy
company, J-POWER works on to address the KPIs closely related to
expansion of CO2 free power sources , CO2 free hydrogen energy
and zero-emission power sources and power network set forth in JPOWER BLUE MISSION 2050 towards realisation of carbon

Page 57 of 65

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
neutrality. DNV believes that such initiatives will contribute to JPOWER s aim to improve corporate value by taking on the challengeof transitioning based on various approaches to achieve carbon
neutrality aiming at the decarbonisation of the energy supply . In
addition, DNV believes that the KPIs will contribute to the realisationof the J-POWER BLUE MISSION 2050 and simultaneous pursuit ofgoals related to sustainability management and J-POWER s businessstrategies.
The selected KPIs are listed below and detailed in Schedule-2.
KPIs
KPI 1: Reduction of CO2 emissions (J-POWER Group domestic
power generation business)

1b

KPI - Measurability

KPIs should be measurable or quantifiable
on a consistent methodological basis;
externally verifiable; and able to bebenchmarked, i.e. as much as possibleusing an external reference or definitions
to facilitate the assessment of the SPT slevel of 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 toevaluate historical performance of the KPIs
selected. In situations where the KPIs
have not been previously disclosed,
fundraiser should, to the extent possible,
provide historical externally verified KPIvalues covering at least the previous 3
years.

Confirmed documents:- Framework- J-POWER Group
Integrated Report
2022- J-POWER BLUEMISSION 2050
Interviews with theFundraiser

Page 58 of 65

DNV concludes that the reduction of CO2 emissions as a KPI ismeasurable based on a consistent methodology (GHG Protocol),externally verifiable and can be benchmarked against externalreferences.
DNV confirmed that the KPI selected by J-POWER are linked to the
KPIs in the Medium-Term Management Plan and the performanceover time has been managed internally to be consistent with the plan.

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1c

KPI ‒ Clear definition

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

Confirmed documents:- Framework- J-POWER GroupESG data
collection

DNV confirmed that the KPI selected by J-POWER provide a clear
scope of assessment and calculation methodology. Specifically, it iscalculated as follows.

Interviews with theFundraiser

KPI 1: Reduction of CO2 emissions from the J-POWER Group's
domestic power generation business compared to the baseyear
DNV confirmed that this calculation method has a high correlation asa method of evaluating the emission intensity of J-POWER.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

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

Criteria

Requirements

Work Undertaken

DNV Findings

2a.

Target Setting Meaningful

The SPTs should be ambitious, realistic
and meaningful to the fundraiser sbusiness and be consistent with thefundraisers overall strategic
sustainability/ESG strategy.

Confirmed documents:- Framework- J-POWER Group
Integrated Report
2022- J-POWER BLUEMISSION 2050

DNV confirmed that the substantive contribution of J-POWER to the
reduction of CO2 emissions is consistent with the ambitious target of
46% set in The Sixth Strategic Energy Plan , based on theperspective that the SPTs support the reduction of CO2 emissions set
in Expansion of CO2 free power sources , CO2 free hydrogen energy
and zero emissions of power sources and Power network set forthin J-POWER Blue MISSION 2050 . DNV also confirmed that there is amore concrete plan internally and these SPTs are ambitious, realistic
and meaningful. In addition, DNV confirmed that the achievement of
SPTs is consistent with J-POWER s initiatives towards the realisationof carbon neutrality.

Interviews with theFundraiser

2bTarget Setting ‒Meaningful

SPTs should represent a material
Confirmed documents:
improvement in the respective KPIs and be- Framework
beyond a Business as Usual trajectory;- J-POWER Group
where possible be compared to a
Integrated Reportbenchmark or an external reference and2022
be determined on a predefined timeline,- J-POWER BLUE
set before (or concurrently with) the
MISSION 2050
issuance of the loan.
- Supplementary
document for Useof Proceed
instruments

Regarding the targets set by J-POWER to reduce CO2 emissions(domestic power generation business) by 9.2 million tons by FY2025(SPT1) and by 46%/22.5 million tons by FY2030 (SPT2) compared tothe actual emission for FY2013, the substantive contribution to
reducing CO2 emissions is consistent with the ambitious target of 46%
set in The Sixth Strategic Energy Plan and the contribution to future
CO2 reduction will exceed "Business as Usual".

Interviews with theFundraiser
2cTarget Setting ‒benchmarks

The target setting exercise should bebased on a combination of benchmarking
approaches:
The fundraiser s own performance overtime for which a minimum of 3 years,
where feasible, of measurement trackrecord on the selected KPI(s) is

Confirmed documents:- Framework- J-POWER Group
Integrated Report
2022- J-POWER BLUEMISSION 2050

Page 60 of 65

DNV confirmed that the process to set the SPTs is based on an
appropriate combination of benchmarking approaches.
-

The target setting up to FY2030 has been provided as a
guideline, with KPI information based on appropriate data basedon J-POWER s actual emissions for FY2013.

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

recommended and when possible forwardlooking guidance on the KPIInterviews with theFundraiser-

The SPTs are evaluated as ambitious based on the most recent
performance level of J-POWER.

-

DNV concludes that the SPTs are appropriately linked to the GHG
emission reduction targets set by the Agency for Natural
Resources and Energy. In addition, the Framework is consistent
with national guidelines which are consistent with the goals of
the Paris Agreement. J-POWER will be supported by KPIs/SPTs
and respective action plans for the realisation of J-POWER BLUEMISSION 2050 .

The SPTs relative positioning versus thefundraiser s peers where comparable oravailable, or versus industry or sector
standards
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
2dTarget setting ‒disclosures

Disclosures on target setting should makeclear reference to:
1. The timelines of target achievement,
the trigger event(s), and the frequency
of SPTs
2. Where relevant, the verified baseline
or reference point selected for
improvement of KPIs as well as therationale for that baseline or reference
point to be used

Confirmed documents:- Framework- J-POWER Group
Integrated Report
2022- J-POWER BLUEMISSION 2050

DNV confirmed that the SPTs settings have been appropriately
disclosed as follows.
-

The timeline for achieving the SPT is set up until FY2030. For theinterim process leading up to the determination of the trigger
event, the SPTs have been set based on SPTs calculated by linear
interpolation between the actual emission for the base year of
FY2013 and targets by FY2030.

Interviews with theFundraiser-

The base year for the SPTs concerning the reduction of CO2
emissions is the actual emission for FY2013, which is consistent
with the base year (2013) set by the Agency for Natural
Resources and Energy.

-

Through the Framework, Action Plan and Roadmap towards
carbon neutrality by 2050, the progress of the CO2 emission
reduction has been detailed in terms of how it will be achieved.

3. Where relevant, in what situations
recalculations or pro-forma
adjustments of baselines will takeplace
4. Where possible and taking into
account competition and confidentiality
considerations, how the fundraiser
intends to reach such SPTs

Based on the information provided by J-POWER, DNV has concluded
that the SPTs are realistic, the plan is feasible, and the SPT targets
outlined in the Framework are likely to be met.
The following SPTs are not set for each year due to the fact that theamount of electricity generated by power supply and demandconditions cause fluctuations in the amount of electricity generated byPage 61 of 65

J-POWER Group Green/Transition Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
power supply and demand, and that initiatives need to be
implemented with due consideration from the perspective of ensuring
electricity supply capacity.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

SLBP/SLLP-3 Bond Characteristics
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3aBond Characteristics‒ SPT
Financial/structural
impactThe SLB will need to include a financial
and/or structural impact involving trigger
event(s) based on whether the KPI(s)reach the predefined SPT(s).

Confirmed documents:- Framework

DNV confirmed that the inclusion of trigger events in the Frameworkcomplies with the requirements set forth in the SLBP.

Interviews with theFundraiser

DNV confirmed that, for sustainability-linked bonds executed under
the Framework, trigger events and their scope of impact with specific
SPTs observation timing and performance requirements are linked totarget achievement and financial incentives.

Bond Characteristics‒ Fallback mechanism

Any fallback mechanisms in case the SPTs
cannot be calculated or observed in asatisfactory manner should be explained.

Confirmed documents:- Framework

Fundraisers may also consider including,where needed, language in the bond or
loan documentation to take into
consideration potential exceptional events.

Interviews with theFundraiser

3b

DNV confirmed that J-POWER considered the appropriate fallback
mechanisms and, as a result, decided not to set up another SPT or
calculation method at this time since the risks of not being able tocalculate or observe were extremely small.
J-POWER has explained that changes may be made to KPIs and SPTs
after discussion with external certification agencies, when there arereasonable grounds, such as changes in business environment,
business structure, KPIs, etc., regardless of whether such events are
due to external factors or the result of J-POWER s management
decision.
Changes in the characteristics of the bond/loan may be foregone if
there are reasonable grounds for a temporary non-achievement of the
SPT due to transient changes in domestic electricity supply capacity.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

SLBP/SLLP-4 Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4a.

ReportingFundraisers of SLBs should publish, andkeep readily available and easily
accessible:
Up-to-date information on theperformance of the selected KPI(s),including baselines where relevant

Confirmed documents:- Framework

DNV confirmed that the necessary information will be disclosed to the
public in a timely manner for the following details required by the
SLBP/SLLP.

Interviews with theFundraiser-

KPIs performance against SPTs will be verified by an external
agency at least once a year until the completion of redemption or
repayment after the execution of Transition-Linked Finance anddisclosed in the Integrated Report or on the website or disclosed
to the lenders (in the case of loan only).

-

SPTs achievement status will be verified annually by anindependent third-party organisation and used for determinationof the financial characteristics (such as bond interest rate) orother financial incentives.

A verification assurance report relative to
the SPT outlining the performance against
the SPTs and the related impact, andtiming of such impact, on the loan sfinancial and/or structural characteristics
Any information enabling investors tomonitor the level of ambition of the SPTs
This reporting should be publishedregularly, at least annually, and in any
case for any date/period relevant forassessing the SPT performance leading toa potential adjustment of the SLB s
financial and/or structural characteristics.

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J-POWER Group Green/Transition Finance Framework Second Party Opinion

SLBP/SLLP-5 Verification
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

5aExternal Verification

Fundraisers should have its performanceagainst 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

DNV confirmed that J-POWER plans to undergo independent
verification of KPI-related data at least once a year by qualified
external assessment agency that has relevant expertise in SPT trigger
events.

Interviews with theFundraiser

Page 65 of 65