Scandinavia to get green-power boost as EU throws its weight behind Prime Capital energy fund

• EIF invests €100 million in green-energy fund focused on expanding clean power.
• EIF pledge is to fund run by Germany-based Prime Capital, bringing total fund size to €313 million for projects in countries such as Sweden, Finland and Norway.
• Initiative, backed by InvestEU programme, to promote renewable energy including onshore wind power and green hydrogen.

Luxembourg/Stockholm/Frankfurt, 17 October 2024: The European Investment Fund (EIF) is committing €100 million to accelerate the development of renewable energy in the Nordic countries, including onshore wind power and green hydrogen. The EIF pledge is to a green-energy infrastructure fund run by Germany-based Prime Capital AG and increases to €313 million the total commitments to the fund, which targets projects in countries such as Sweden, Finland and Norway.

The EIF backing is part of Prime Capital's successful third closing of the fund, which is called the Prime Green Energy Infrastructure Fund II (PGEIF II). It continues the strategy of a predecessor with the same name. Prime Capital's first energy fund deployed its capital in just over two years, delivering returns significantly above target. PGEIF II's target size exceeds €650 million.

PGEIF II focuses on European renewable-energy projects particularly in Scandinavia, where Prime Capital has built a strong portfolio in the onshore wind market. The fund's raised capital will be invested primarily in clean-energy infrastructure, including onshore wind farms and sites that combine energy generation, transition and battery storage. In addition, the fund will also invest in green fuel production as part of its diversification strategy. These projects will strengthen Europe's energy independence, advancing the REPowerEU initiative.

Dr Mathias Bimberg, head of infrastructure at Prime Capital, said its expertise in the region and knowledge of the local wind-power market were instrumental in attracting investor interest, including the EIF.

"Our strategy was built on the excellent wind resources in Scandinavia and our greenfield build-to-core approach, which has consistently delivered above-market returns," he said. "We are excited to continue this work with PGEIF II while expanding into other high-potential renewable energy markets across Europe."

PGEIF II is categorised as an Article 9 ("dark green") fund under the EU's Sustainable Finance Disclosure Regulation (SFDR), meaning it is exclusively focused on sustainable investments that contribute to the EU's climate and energy goals. It also supports energy-transition technologies including energy storage and the production of green fuels.

"Prime Capital's second green energy infrastructure fund is perfectly aligned with our goals to promote strategic and sustainable investments," said EIF Chief Executive Marjut Falkstedt. "This investment will accelerate the shift to renewable energy in Europe, contributing to its energy autonomy as well as to the fight against climate change."

Prime Capital initiated its energy-infrastructure strategy more than a decade ago, is one of the largest investors in the Scandinavian onshore-wind sector and is set to expand its position through PGEIF II. The company has successfully completed 45 equity transactions to date. Through its first fund the company manages renewable-energy projects with a capacity of 1.3 gigawatts under construction or in operation, generating approximately 4 terawatt hours of green electricity annually.

"Our energy-infrastructure strategy remains a central pillar of our investment activities," said Prime Capital Chief Executive Officer Andreas Kalusche. "We are particularly pleased to have achieved three successful closings, despite the challenging market environment, and we are delighted to welcome the EIF as a major investor alongside several new national and international investors."

Approximately 45% of the commitments to PGEIF II come from existing investors, with 55% from new investors, including EIF.

Background information

EIF

The EIF is part of the European Investment Bank (EIB) Group. It supports Europe's SMEs by improving their access to finance through a wide range of selected financial intermediaries. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, the EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.

InvestEU
The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union's policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

REPowerEU

In 2022, the European Commission introduced the REPowerEU plan to rapidly reduce dependence on Russian fossil fuels and fast-forward the green transition. In 2023, the Bank's investments in this plan rose to €21 billion. The EIB Group will provide €45 billion in additional support to the REPowerEU plan over five years by financing businesses and public authorities working on clean energy projects. The EIB will also finance EU manufacturing in strategic net-zero technologies and the extraction, processing and recycling of critical raw materials. The funding will be fully deployed by 2027, and it is expected to mobilise more than €150 billion in investment for targeted sectors.

Over the past decade, the European Investment Bank (EIB) Group has channelled around €108 billion into the European Union's energy sector and additional finance for clean energy projects around the world. These investments are now helping Europe switch to clean energy sources and sharply reduce its reliance on Russian gas.

Wind Manufacturing

In support of REPowerEU objectives, in December 2023 the EIB Board of Directors agreed to provide €5 billion to strengthen the provision of commercial bank guarantees for companies providing components to the wind power industry. The funds are expected to support up to €80 billion of investment in wind power and increase new installed generation capacity by 32 GW. The guarantees will back investment by companies manufacturing wind power components and grid interconnection equipment. This is an important element of the coordinated support provided by the EIB and European Commission for EU wind power, which is essential to delivering the European Green Deal. Improving access to finance is a cornerstone of the European Wind Power Action Plan, announced by the European Commission in October 2023. The initiative also complements national efforts to back wind turbine manufacturers and wind energy supply chain companies throughout Europe.

Prime Capital

Founded in 2006, Prime Capital AG is an independent asset management firm and financial services provider, owned by management and employees. The company takes a holistic, cross-divisional approach and specializes in Alternative Investments, in particular in Absolute Return, Infrastructure including Renewable Energy, and Private Debt. Furthermore, the company offers Access Solutions. Prime Capital currently employs about 125 people in Frankfurt and Luxembourg and is regulated by BaFin and CSSF.

As of June 2024, Prime Capital has approximately €4.3 bn Assets under Management as well as €8.4 bn Assets under Administration.

Press contacts:

EIB Group: Thomas Eriksson | [email protected]

Prime Capital AG: Andreas Kalusche | Tel: 0049 69 9686 984 36 | [email protected]

Dr Mathias Bimberg Kihlgren | Tel: 0049 69 9686 984 308 | [email protected]

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