The European Investment Fund, in collaboration with 123 Investment Managers and Lendosphere, on Monday 27 May the launch of a new sustainable debt fund aimed at accelerating the deployment of renewable energy sources. Serving as the lead investor, the EIF disclosed its commitment of €30m to the first closing of the 123 Transition Energétique 2 fund.
The fund falls under article 9 of the Sustainable Finance Disclosure Regulation, signifying a clear sustainable investment objective aligned with the EU taxonomy. Managed by 123 Investment Managers and advised by Lendosphere, it combines financing through a marketplace lending platform with contributions from institutional investors. Targeting small and medium-sized industrial enterprises with established track records and revenues, the fund provides tailor-made senior debt to accelerate their development in the renewable energy sector.
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The EIF observed that smaller renewable energy projects frequently encounter a funding shortfall, whereas larger endeavours commonly secure financing from banks or specialised funds. The 123 Transition Energétique 2 fund will address this disparity by providing customised lending solutions tailored for small and medium-sized enterprises engaged in modest-scale projects aimed at mitigating greenhouse gas emissions.
These projects include the development, construction and operation of wind and solar infrastructure, as well as other renewable energy plants such as hydraulic, biomass and geothermal energy facilities. The fund’s strategy is designed to support the energy transition in Europe by financing projects essential for speeding up the adoption of renewable energy sources.
In addition to financing through the marketplace lending platform, the fund will systematically co-invest with private investors of the crowdfunding platform Lendosphere. Leveraging Lendosphere’s expertise in renewable energy financing, the fund aims to support over 100 small-scale renewable energy projects.
EIF chief executive said in the communiqué that the EIF was “delighted” to contribute to the Energy Transition 2 fund, aligning with the EIF and European Investment Bank Group’s priorities of accelerating the energy transition in Europe and supporting the growth of European businesses.
Xavier Anthonioz, founder and CEO of 123IM, emphasised the fund’s alignment with renewable energy investment objectives and its potential to meet the needs of companies while providing investors with quality reports on carbon emissions reduction.
Laure Verhaeghe, co-founder and CEO of Lendosphere, highlighted the fund’s role in addressing the financing the needs of SMEs in deploying renewable energies, combining the quality requirements of institutional investors with the positive impact and return expectations of individual investors on the platform.
123 Investment Managers aims for an initial closure in the latter half of 2024, incorporating the EIF’s €30m commitment. The target size of the 123 Transition Energétique 2 fund is projected to range between €100m and €120m.