ESG and Sustainable Investing

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The Billion Euro Energy Transition Investment Opportunity
Investing in the energy transition is not just beneficial: it is essential! Developing renewable energy, low carbon transportation and energy efficiency are the main levers that will help meet the goals set by the Paris Agreement. Institutional investors have a key role to play in financing the energy transition, which requires huge amount of capital.

Financing the energy transition means investing in tangible assets in power generation infrastructure such as wind farms, solar power plants, hydroelectric infrastructure and all associated storage solutions, as well as in energy use infrastructure: electric or hydrogen vehicle and fleets, as well as all the deployment of charging stations.

Energy transition infrastructure can offer access to a predictable, inflation-linked and stable cash flows with a low correlation to the economic cycles and financial markets. In a low interest rate environment, they can offer an attractive yield and k since building and commissioning times are much shorter than traditional infrastructures, they can offer a quicker return on investment. These investments are therefore an attractive tool for diversifying institutional clients’ portfolios.

There are massive requirements for financing: between now and 2030, nearly 1,700 billion euros are expected to be invested in Europe3. There are already a wide range of assets associated with energy transition infrastructure What’s more, with of the shift to low carbon mobility, there are a variety of different types of infrastructure and new energy technologies meaning this asset base is likely to become even more diversified.

Mirova is one of the top energy transition infrastructure investors in Europe3, with 20 years of experience in managing investment funds dedicated to the energy transition. Mirova manage 3.5 billion euros of assets invested on behalf of leading institutional investors in wind farms, solar plants, hydroelectric power, biomass, biogas, storage, electric mobility and soon in green hydrogen.

A Wide Range of Investment Opportunities
Involved from the very beginning in the financing of renewable-sourced energy production infrastructures, Mirova has a unique perspective on this market, contributing to projects that are new, whether in terms of technology, maturity or geography.

A Wide Range of Investment Opportunities


Mirova Energy Transition in a Nutshell

Investments to energy transition represent an opportunity for institutional investors to play a role in the fight against climate change. Renewable energy is one of the fastest growing segments within the infrastructure market and clean energy production, grid connection, storage and electric transportation represent a compelling investment opportunity in the move towards a low-carbon economy.
The energy infrastructure market offers several attractive features for investors
  • A transition in motion:
An increase of the share of renewable energy in energy consumption in the EU: from 9.6% in 2004 to c. 20% in 2020 –The European target is 32% by 20301 which would require massive investments of €1.7 trillion2 over the next 10 years.
  • An evolving industry:
1) Competitiveness: the ever-falling clean energy production cost puts renewables at parity with conventional generation sources.
2) Innovation:
growing number of solutions to the energy transmission, distribution & storage challenges enable integration of existing & emerging renewable technologies in energy systems.
3) Financing: mature renewable energy technologies allow a sound cash flow predictability.
  • A diversifying asset class
With low correlation to the business & capital market cycles and providing attractive yield potential
Long-term investments in tangible assets with relatively steady, low volatile, inflation-linked cash flows.
  • Favorable treatment under Solvency II:
SCR of 15% with look-through analysis vs. 49% for private equity type investments.
Mirova exhibits the following key competitive advantages:

Experienced investment team
  • 20+ years experience in structuring & managing energy transition infrastructure fund: one of the longest track records in Europe through 5 investment funds successfully raised and deployed amounting to 3.5B€ of AUM
  • 1,000+ projects financed, representing 5.8GW of installed capacity financed in 19 European & OECD countries
  • All team members have a robust background in energy transition, core skills in financing, sourcing, structuring and in asset management

Pioneer in energy transition projects
  • Exposure to Core – Greenfield/ Brownfield infrastructure – and to corporate infrastructure through mobility or renewable developers, mainly in Europe
  • Long-term partnerships & co-investing with industrials to create a strong alignment of interests & secure proprietary deal flow
  • Responsive & flexible approach to deal structuring to best match the project developer’s expectations: equity and/or mezzanine
  • J curve mitigation through investments in quickly operational greenfield projects blended with operating brownfield assets or through mezzanine that enables quick value enhancement & cash flow generation allowing early repayment to investors
  • Merchant exposure managed through a diversified approach of electricity market mechanisms and securing regulated or private offtake agreements (PPA)
  • Mix of yield-driven & value creation performance (revenues from the asset ongoing operation ; investments sold within 7-10 years)
  • Hands-on approach to asset management: renegotiation of maintenance and operating contracts, refinancing capabilities, representation on the governing bodies of the project companies

An impact-driven approach
  • Build a 100% low-carbon, climate resilient (compatible with a 2°C1 climate scenario2) & maximising job creations
  • Pioneering lifecycle approach to environmental, social & biodiversity risks/opportunities assessment
  • Innovative opt-in impact scheme to finance non-profit projects related to fight against energy poverty & energy access & sponsor biodiversity research programmes
  • Affiliate: Mirova
  • Type: Illiquid
  • Asset type: Assets (60%-70%) & Corporate Infrastructure (30%-40%)
  • Region: Europe and residually (max 15%) in other OECD countries
  • Sector diversification: 
  • • Assets, Corporate Infrastructure
    • Sectors: Solar PV, Hydro, Onshore & Offshore Wind, Biomass & Biogas, Mobility, Energy storage, Hydrogen & e-fuels, Energy efficiency
    • Geographies: Mainly Europe, opportunistically Asia-Pacific (local presence)
  • Maturity: 12 years (+2 years)
  • Main risks: Capital loss, economic, market, liquidity, project, credit, electricity network, operational, regulatory, counterparty & compliance, sustainability risks
 

Discover the Thinking of Mirova on the Energy Transition:

Mirova, ADEME Investissement and Fondaction invest €60 million in SOFIAC to improve energy efficiency for companies in France.

January 25, 2024

ENGIE Acquires MIROVA's 51% Stake in the Goya Wind Project

January 18, 2024

Hyperion Renewables Closed A Total Investment Of €140 Million From Mirova To Accelerate The Transition To An Independent Power Producer

December 8, 2023

Energy Transition: Innovation Gives Way To Consolidation

Higher interest rates leads Mirova to focus on asset performance optimisation after intense pioneering period.

October 11, 2023 Raphaël Lance

Mirova Targets €2 Billion for its Sixth Strategy Dedicated to Energy Transition Infrastructure

October 5, 2023

Elyse Energy Signs E-fuels Financing Deal With Hy24 And Mirova

September 26, 2023

Mirova Helps To Finance The Construction Of 175 Photovoltaic Projects In France

September 26, 2023

Across the Universe #2 - The Energy Transition

In this second edition of 'Across the Universe', Hervé Guez, Raphaël Lance, and Marc Romano from Mirova, discuss the strategic role of investors in channeling financing towards innovation and solutions for the energy transition.

Across The Universe #1: The Energy Transition

To accelerate the energy transition in light of the climate emergency, it is crucial that we bring all players to the table, argue Hervé Guez, CIO for Equity, Fixed Income and Social Impact Investing, Raphaël Lance, Head of Energy Transition Funds, and Marc Romano, Head of Impact Private Equity at Mirova.

June 7, 2023

Mirova Energy Transition Infrastructure

Read Mirova’s Impact Report 2022.

July 26, 2023

Driveco Raises €250 Million To Become One Of The European Leaders In Electric Vehicle Charging Infrastructure

May 19, 2023

Girasole Energies, a new independent player in photovoltaic solar energy production, raises €96 million from Mirova

March 24, 2023

Mirova and Eolus sell two windfarms in Sweden

February 13, 2023

Evecon And Mirova Set Up A Renewable Energy Platform Which Will Build The Largest Solar Park In The Baltics

January 2, 2023

Mirova Invests In Zunder In Order To Accelerate EV Charger Rollout In Southern Europe

October 27, 2022 Raphaël Lance

Mirova Invests In The Independent Renewable Power Producer Sunly

October 27, 2022 Raphaël Lance

Energy Transition: Reconciling Environmental and Social Issues in Europe Amidst Turmoil

How the environmental and social issues associated with the energy sector are addressed through Mirova strategies in the context of the latest European plans.

June 16, 2022

TagEnergy Welcomes Two New Major Investors, Mirova and Omnes, to Support its Global Project Pipeline and Speed Energy Transition

April 14, 2022

Mirova and RIVE Private Investment Sell a Portfolio of Six Wind Farms in France to BKW

March 22, 2022

Mirova and Other Investors Join Forces to Make Record €200 Million Investment in Green Hydrogen Pioneer Hy2gen AG

February 17, 2022

Professio Energia Acquires Two Wind Farms From Mirova

January 19, 2022

Renewable Energy in Light of Grid Parity

The gradual reduction of public support measures is ushering renewable energies into a new era; that of autonomy on electricity trading markets.

June 30, 2021

Renewable Infrastructure as an Asset Class

One of the most important challenges for institutional investors is to deploy large amounts of capital and manage increasingly high liability commitments in an environment of low-yielding opportunities.

April 29, 2021 Raphaël Lance

TTR Energy partners with five institutional investors to create independent electricity producer Hexagon Renewable Energy and acquire a portfolio of 19 wind projects in France

April 27, 2021

Green Hydrogen, A Catalyst for the Energy Transition

A multipurpose gas with outstanding energy properties: per kilo, as it contains 2.2 times more energy than natural gas, 2.75 times more than petrol and three times more than crude oil.

April 27, 2021

Mirova acquires a stake in Corsica Sole

April 21, 2021

Mirova and Banque des Territoires Announce Investment in the Clem’ Eco-Mobility Initiative: a Vehicle Sharing Platform for Businesses in Paris

April 6, 2021

Hydrogen Mobility Pioneer, Hype, is Entering a New Phase with HysetCo’s Acquisition of Major Taxi Firm Slota

March 10, 2021

Financing the Necessary Ecological Transition of Transport

The energy, industry, buildings and transport sectors together currently account for three quarters of global greenhouse gas emissions, with mobility alone representing no less than 24% of CO2 emissions caused by energy combustion.

March 2, 2021

Mirova Demonstrates Leading Edge Position in Area of Energy Transition Infrastructure

February 22, 2021

New Mirova Co-Investment Vehicle Participates in Major Renewable Infrastructure Project Alongside Engie and Credit Agricole Assurances

January 20, 2021

Electric Vehicle Charging Expert, DRIVECO Opens its Capital to Mirova

November 24, 2020

Opportunities in Next-Generation Energy Infrastructure

Investment opportunities in the energy transition are no longer limited to the mature solar and wind segments.

November 19, 2020 Raphaël Lance

ENGIE and Mirova Partner to Accelerate Biogas Investments

April 29, 2020

Mirova awarded twice at the 2019 "Infrastructure Investor Awards"

March 30, 2020

Mirova Joins Akuo to Finance 132 MW of Wind Power in Poland

February 17, 2020

Final close at €857m for Mirova-Eurofideme 4

November 14, 2019

Mirova's Goya project wins ‘europe wind deal of the year’ award at 2018 PFI awards

June 28, 2019

Mirova Eurofideme 4 hits first close at 250M€ to support the energy transition in Europe

December 17, 2018

Mirova acquires 25 MW solar photovoltaic project in Portugal

March 22, 2018

Energy Transition: Clean Investments for Yield-hungry Investors

Renewable energy is one of the fastest growing segment within the infrastructure market.

March 21, 2018 Raphaël Lance
Watch

The Renewable Energy Market in Europe

VIDEO (4’18) – Raphael Lance, Head of Renewable Energy Funds at Mirova

March 1, 2018 Raphaël Lance

Mirova wins 3rd award in a row at SIATI 2017 with Mirova-Eurofideme 3

June 26, 2017

Mirova and Valeco Team up to Support Green Power

November 14, 2016

Mirova obtains the new Energy and Ecological Transition for Climate label for three funds

June 14, 2016
1 Source : International Renewable Energy Agency (IRENA)'s Global Energy Transformation Report: A roadmap to 2050.

2 https://www.infrastructureinvestor.com/ii-50-infras-resilience-shines-through-in-its-fundraising/

3 Based on financial assumptions. These do not constitute a contractual commitment from Mirova and shall not engage its responsibility. Investments in real asset portfolios are reserved for specific investors, as defined by their respective regulatory documentation, and are mainly subject to loss of capital risk. Mirova reserves the right to modify the information presented at any time without notice, and in particular anything relating to the description of the investment process, which under no circumstances constitutes a commitment from Mirova.

Published in September 2023.

Mirova
Affiliate of Natixis Investment Managers French Public Limited liability company
Share Capital: €8,813,860
Regulated by the Autorité des Marchés Financiers (AMF) under n° GP 02014.
RCS Paris n° 394 648 216
59 avenue Pierre Mendès France
www.mirova.com

Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris
www.im.natixis.com

This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.

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