Earlier this year, French investment house, Ardian, established a clean energy fund whose ambitious investment strategy involves raising at least €1bn for renewable energy projects.
Ardian has been at the forefront of private equity’s transition to the sustainable energy sector for some years, and the creation of the fund only serves to reinforce its position as a leader amongst green infrastructure investors looking to both boost profits and tackle the climate crisis. The firm’s approach is proof private equity can lead the way…
The Ardian Clean Energy Evergreen Fund (ACEEF) is an open-ended fund that adheres to Article 9 under the EU’s Sustainable Finance Disclosure Regulation. Targeting €1bn in investments over the first cycle, the fund is targeting mature renewable technologies such as solar, wind and hydroelectric, as well as emerging technologies such as biogas, biomass, storage, and energy efficiency.
“ACEEF is a new innovative step to provide long term capital to accelerate the energy transition. The fund, managed by a highly qualified team with a track record spanning 15 years and a large network of industrial experts, offers to our clients a unique platform to operate in the renewable energy sector with an industrial approach. Ardian’s strategy to accelerate the energy transition is more relevant than ever to fight climate change and to contribute to energy independence,” said Mathias Burghardt, Head of Ardian Infrastructure and Member of Ardian’s Executive Commitee.
Prior to the launch of ACEEF, Ardian already managed 7.6 GW of renewable energy production capacity in Europe and the Americas through its various funds within its infrastructure business. The idea of this new initiative is to provide investors with an opportunity to invest in long-term projects that will not only just drive capital value creation and create a presence in the renewable energy sector, but make a real-world difference as countries struggle to get ahead in the energy transition and meet net zero targets for the next decade.
The fund has had an excellent start. Over half of the first €1bn of investments have already been invested in a ‘seed portfolio’ of 12 wind and solar assets, totalling 1 GW of capacity in Europe and the Americas. One example is its acquisition in April of a 100MW PV pipeline in Sardinia, Italy. The investment is focused on three photovoltaic projects that aim to qualify as agro-voltaic by combining existing agricultural and sheep farming activities with clean photovoltaic energy production.
“This investment perfectly suits the strategy of the Ardian Clean Energy Evergreen Fund, which benefits from Ardian’s deep industrial expertise, including from its operations engineers and investment professionals, as well as the firm’s bespoke OPTA technology. The transaction demonstrates once again Ardian’s industrial approach in the energy sector, as we support the real economy with long-term capital and a clear goal to accelerate the energy transition. With ACEEF, Ardian’s mission is to take further responsibility for advancing and developing sustainable projects to fight climate change and to contribute to energy independence,” said Mathias Burghardt.
Fighting climate change
The cornerstone investor of the project is AXA Group, for whom Ardian is managing the seed portfolio. AXA’s involvement is testament to the long-term value of such investment projects. The involvement of Opta, Ardian Infrastructure’s in house digital tool which collects and analyses data from its renewable assets, only serves to strengthen the fund’s structural integrity and commitment to long-term value creation, expertise and data-driven analytics. All with the ultimate goal of meeting climate targets.
“We believe in the energy transition, which implies we are convinced that energy will cost more in the future – that people will have to pay the price for independent and clean energy. So having some exposure to the market is a natural thing to have. And having the ability to analyse merchant exposure and take a view on what should be the right exposure to the market is part of our business,” Burghardt said.
Ardian’s presence in the renewables market stretches beyond ACEEF. The firm has also invested millions in hydrogen as a green energy source via its Hy24 project, that is dedicated to developing a value chain capable of pushing hydrogen to the forefront of the clean energy transition thanks to its versatility as a low-carbon energy-carrier. The fund’s original target of €1.5bn was surpassed in the autumn of 2022 as a multitude of players across different sectors recognise the potential of hydrogen as a value creator.
Ardian’s ability to attract such investment into the renewables sector bodes well for the future of ACEEF and, more generally, our global push for cleaner energy sources. Getting the private sector on board is key, clever investment even more so. Ardian certainly has a portfolio ready to drive forward global decarbonisation efforts.