Financing the energy transition involves pooling projects that are often too small to be considered individually by the funds.
How to finance the development of the energy transition? New projects are often small and individually require too much work for large investment funds with hundreds of millions of dollars to employ. “There are a myriad of small projects in clean mobility, biomass or the stability of electrical systems for example. But their investment needs are evolving around a few million euros. There is a bottleneck in the financing of the energy transition that can be reduced by aggregating all these small projects ”, explains Julien Touati, head of Meridiam’s operational strategy.
A market fund dedicated to energy efficiency
To remedy this problem, Meridiam and a group of French institutional investors (CNP Assurances, FRR, Allianz, Aviva, etc.) launched a market fund two years ago. Objective: to invest with a long-term horizon in medium-sized projects (“greenfield”) relating to energy efficiency, such as heating networks, energy recovery from waste, electricity and gas networks and renewable energies. “Today, ten projects have been financed and the 485 million euros of the fund are very largely invested”, says Julien Touati.
The key for Meridiam was to find ways to pool projects. This year, it acquired Allego, a Dutch operator of charging solutions for electric vehicles, which aggregates hundreds of thousands of charging points in Europe. “Equipping a large European city with charging stations requires only a few million euros of investment. Via Allego we can invest hundreds of millions of euros. “
Methanization of agricultural waste
Meridiam also acquired a stake in Evergaz, a specialist in the production of biogas by methanization of agricultural waste. Meridiam Transition will participate to the tune of 30 million euros in the projects of the company, which already has 7 biogas plants in France, Germany and Belgium but is targeting a portfolio of 30 plants by 2020. “In all, we have 80 million euros invested in anaerobic digestion and biogas, which makes us one of the leading European players”, explains Julien Touati.