Private equity investment in Europe’s cleantech sector is likely to set a new record thanks to several mega-deals in the first half of the year.
PitchBook’s Q2 2024 European PE Breakdown reported that the total value of cleantech deals in the region hit €15.5 billion (about $16.9 billion) by the end of Q2. That total has since grown to €15.9 billion as of early August. Last year was the previous record for total cleantech deal value with €19.2 billion invested. The second biggest year was 2021, which recorded €17.7 billion.
The sector has gained more attention as climate change and the energy transition become a priority for investors and policymakers. GPs are also putting more resources into cleantech out of a desire to burnish their ESG credentials and attract LP commitments. Increased activity also results from the sector’s insulation from the macroeconomic environment, according to the PE Breakdown.
While deal value is already at 83% of last year’s total, deal count has only reached 39%. This is due to overall deal volume being supported by a handful of mega-deals in the early part of the year.
Some of this year’s largest deals include Brookfield Asset Management and Temasek‘s proposed €3.5 billion take-private of French renewable company Neoen in May, which could be Europe’s second-largest deal ever in the vertical. KKR also acquired German solar park operator Encavis in a €2.8 billion take-private announced in March.
Climate change remains a global challenge, and some governments intend to work together with private capital to look for solutions.
In the UK, the government has recently launched Great British Energy, a state investment body that will work with the energy department and a new National Wealth Fund, which has been allocated £7.3 billion (about $9.3 billion) in funding from the UK Infrastructure Bank, a state-owned development bank.
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