EIF Commits EUR 30m to 123 Transition Energétique 2 Fund for Renewable Energy SMEs

(IN BRIEF) The European Investment Fund (EIF), under the InvestEU program, pledges EUR 30 million as a cornerstone investor to the 123 Transition Energétique 2 fund, managed by 123 Investment Managers and advised by Lendosphere. This fund aims to address the funding gap faced by SMEs involved in small-scale renewable energy projects across Europe by providing tailor-made senior debt financing. With a sustainable investment objective and alignment with the EU taxonomy, the fund targets a first closing at H2 2024, contributing to the EU Green Deal and climate-neutral economy objectives. Managed by 123IM and benefiting from Lendosphere’s expertise, the fund seeks to accelerate the deployment of renewable energy sources while attracting additional private investment into the sector.

(PRESS RELEASE) LUXEMBOURG, 27-May-2024 — /EuropaWire/ — Managed by 123 Investment Managers, the fund is advised by Lendosphere, its crowdfunding platform focused on renewable energies. The European Investment Fund (EIF), backed by the InvestEU program, announces its EUR 30m support as a cornerstone investor at first closing to the 123 Transition Energétique 2 fund managed by 123 Investment Managers and advised by Lendosphere, its renewable energy-focused crowdfunding platform. The fund will contribute to the fight against climate change by providing tailor-made senior debt to SMEs and small mid-caps accelerating the deployment of renewable energies. Borrowers targeted are industrial SMEs with meaningful track-records, revenues and assets in seeking additional non-dilutive debt financing to accelerate their development.

While large-scale infrastructure and renewable energy projects find adequate financing through banks or specialized funds, smaller individual renewable energy projects face a significant funding gap.

The fund seeks to bridge this crucial gap by offering bespoke lending products tailored for SMEs involved in various small-scale projects aimed at reducing greenhouse gas emissions. These projects encompass the development, construction and operation of wind and solar infrastructures as well as hydraulic, biomass and geothermal energy plants considered to be essential in the coming years to speed up energy transition in Europe.

In addition, the Fund combines financing via a marketplace lending platform with institutional investors’ contributions: it will systematically coinvest with the private investors of the crowdfunding platform Lendosphere. Lendosphere is a 10-year-old actor in the renewable sector, that will act as an advisor to the Fund. The Fund will strongly leverage on Lendosphere’s established experience in the renewable energy financing typically benefitting from, inter alia, Lendosphere’s sourcing and due diligence.

The EIF’s commitment will be key in supporting 123 Investment Managers in attracting additional public and private investors into the fund. For investors, 123 Transition Energétique 2 will offer exposure to robust market drivers, regular returns and risk diversification through a portfolio of circa 40 financings expected to support more than 100 small-scale renewable energy projects.

123 Transition Energétique 2 is classified as an Article 9 fund under the SFDR, with a clear sustainable investment objective and high alignment to the EU taxonomy. The fund’s positive impact will be measured through three indicators ensuring a credible approach with quantifiable results: installed power capacity (MW), renewable production (MWh) and avoided carbon emissions (TCO2eq), influencing part of the Carried interest.

Under the InvestEU mandate, the European Investment Fund has committed to the fund managed/advised by 123IM/Lendosphere to keep on financing the renewable energy sector through senior private debt. This commitment and support symbolize the adequacy between the sustainable investment objective pursued by the fund, which aims at financing entities which are actively participating, directly or indirectly, in the fight against global warming, in the energy transition, climate adaptation and climate change mitigation and the major European objectives of transition to a low-carbon economy. This investment contributes to the EU Green Deal and supports a transition to a climate-neutral economy based on sustainable development, a reduction in dependence on fossil fuels and sustainable management of natural resources, among other goals. In addition, the underlying investments will be predominantly aligned to the EIF’s criteria for Climate Action and Environmental Sustainability. In addition, the Fund is expected to comply with the InvestEU Gender Criteria, as at least 40% of its investment committee will be composed of female members.

123 IM targets a first closing at H2 2024 including EIF 30M€ commitment, and a target size of 123 Transition Energétique 2 at 120-150M€.

EIF Chief Executive Marjut Falkstedt says:” The EIF is delighted to be able to contribute through this InvestEU investment to the Energy Transition 2 fund, which provides financing to small and medium-sized enterprises to accelerate the deployment of various renewable energy sources. This is closely aligned to the main priorities of both the EIF and the EIB Group – namely, accelerating the energy transition in Europe by attracting more private investment in this field, and supporting the development and growth of European businesses across the 27 EU Member States”.

Xavier Anthonioz, founder and CEO of 123IM comments: ‘With the commitment and the trust of EIF, we are pleased to be part of the most reliable investors of the renewable energies sector. The 123 Transition Energétique 2 strategy is the result of our 500m€ track-record in the energy transition. It will fully answer the needs of the companies and provide investors with quality report on the carbon avoided emissions.’

Laure Verhaeghe, co-founder and CEO of Lendosphere, adds: ‘The energy transition is more than ever an emergency, and we are very committed to answering the financing needs of the SMEs that deploy renewable energies on the field. We are very proud to combine the quality requirements of an institutional investor such as EIF to the need of positive impact and return of our platform’s individual investors. This provides a powerful leverage effect to address both the financing and social acceptability needs of the sector.’

Background information

About European Investment Fund

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses by helping them to access finance and venture capital. The EIF is also active in supporting climate fund investments and infrastructure with a strong focus on environmental sustainability. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.

About 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.

About 123 IM

Founded in 2001, 123 IM is an independent management company based in Paris specializing in private equity, private debt and real estate. 123 IM manages € 1.3 billion in assets and offers private and institutional clients a full range of Funds and Club Deal. As a multi-specialist investor, 123 IM has invested € 2,5 billion and supported more than 900 unlisted companies in the health, tourism and real estate sectors.

About Lendosphere

Lendosphere is a crowdlending and crowdequity platform created in 2014. Lendosphere is exclusively dedicated to the energy transition sector, with + 250m€ and 500 projects funded by more than 30 000 individual investors.

EIF Commits EUR 30m to 123 Transition Energétique 2 Fund for Renewable Energy SMEs

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