PE investment in European renewables begins to cool

As PE investment in European renewable energy starts to cool after a record year in 2022, the sector has managed to attract €13.3 billion (about $14.8 billion) across 121 deals so far this year.

Last year, the industry saw €37.5 billion of PE investment across 269 deals as Europe grappled with the effects of Russia's invasion of Ukraine and the consequences of its reliance on Russian gas and other fossil fuels.  
For a period of nine months—from Q4 2022 through Q2 this year—investment in the region has still managed to surpass the €6 billion mark for each consecutive quarter.

This comes at a time when energy transition remains a priority for the region. The EU's REPowerEU Plan launched in May last year aims for renewable power's share of the region's energy consumption to rise to 45% by 2030.

This year, the largest deal so far was Antin Infrastructure Partners' €866 million take-private of Spanish renewable energy company Opdenergy. The firm already owns German sector peer Blue Elephant Energy and has a majority stake in US solar-plus-storage platform Origis Energy.

The largest deal over the past five years was KKR's €4.7 billion acquisition of UK waste management firm Viridor, which has an energy recovery business, in 2020.

KKR was also involved in the €2 billion take-private of London-listed renewable energy company ContourGlobal that was announced last year. The company runs 138 thermal and renewable power plants across Africa, Europe, Latin America and North America. Its use of both fossil fuels and renewable sources for energy production seems attractive, given the rising costs of natural gas coupled with growing desire for sustainable solutions.

Featured image by TebNad/Shutterstock

This article originally appeared on PitchBook News