TerraX srl and SWEN CAPITAL PARTNERS invest more than 100M€ in biomethane projects in Italy

TerraX srl, the leading Italian developer of renewable gas projects, and the SWEN Impact Fund for Transition managed by SWEN Capital Partners, announce the creation of a joint entity to invest in Italy in the biomethane sector.

TerraX is led by biogas expert and pioneer Michael NIEDERBACHER, who has designed and built more than 220 units in 12 countries around the world. SWEN Impact Fund for Transition is the first European impact fund entirely dedicated to the financing of renewable gas infrastructure.

The joint venture will build and operate more than 10 biomethane projects to produce renewable gas on Italian soil, which will be injected into the networks or marketed as bioLNG. The objective is to drastically reduce greenhouse gas emissions from the transport sector, while at the same time recovering waste from the farmers and reducing the use of chemical fertilizers. Once operational in 2022, the plants will produce enough energy to supply 1000 heavy trucks and reduce emissions by 90%.

“We are delighted to launch this investment platform which will accelerate TerraX’ development in Italy” says Michael NIEDERBACHER, CEO and founder of TerraX, and Vice President of the European Biogas Association.
Olivier AUBERT, SWEN’s fund manager, says “We are very enthusiastic to support the Italian biomethane market in its growth. TerraX’s experience and skills in the biogas and biomethane sector are simply unique in Italy, and combined with our own experience in financing and marketing biomethane, constitute pillars for successful and profitable growth“. Aware of these challenges, SWEN Capital Partners, as a responsible ecosystem activator, aims to accelerate the
financing of energy transformation at the heart of the territories in Europe. “Italian market has been well known by our company for the last few years and allows us to see the growing interest in responsible investing that combinesprofitability and impact objectives in favor of the energy transition” concludes Jérôme DELMAS, SWEN’s CEO.

SWEN Impact Fund for Transition 2 (‘SWIFT 2’)

SWEN Capital Partners, a leading player in responsible private equity, recently achieved a major milestone for its impact strategy dedicated to renewable gas. The second vintage of the European infrastructure fund SWIFT 2 raised more than twice its original target, for a total of €580 million—more than three times the final close of SWIFT 1.

SWIFT 2 has already made around twenty investments and should be fully deployed by the end of 2023. The fund invests directly in methanization and biomethane, hydrogen and renewable heat production. More geographically diversified than SWIFT 1, SWIFT 2 has portfolio companies in 10 European countries (France, Spain, Netherlands, Italy, Portugal, United Kingdom, etc.) and, on a smaller scale, in North America. Investment tickets range from 5 to 50 million euros.

Like its predecessor, SWIFT 2 dedicates 60% of its investments to biomethane, a fast-growing renewable energy source. In 2019, when SWIFT 1 was launched in France, there were 50 biogas plants, compared with 700 today.

Since 2019, SWEN CP has contributed to the development of over 200 methanization units.

Favorable regulatory environment for investments in renewable energy

SWIFT 1 and 2 both have an especially strong position on biomethane, however, the share of green hydrogen has increased significantly in this second vintage (30% versus 10% for SWIFT 1). This increase can be ascribed to a market that is beginning to mature in Europe, fostered by a favorable regulatory framework, notably the “ReFuelEU” initiative, which aims to increase reliance on sustainable fuels in the aviation and maritime sectors by 2030, as well as the European Renewable Energy Directive (RED III).

Against this backdrop, several infrastructure projects in the SWIFT 2 portfolio are due to be deployed in 2024, notably Portugal’s first-ever hydrogen production plant.

To keep pace with the exponential growth in SWIFT 2’s activity, the team has doubled in size since the first vintage, and now comprises 12 experts in the gas industry and infrastructure financing, plus 9 ESG/Impact specialists, who are involved in every investment decision. Further recruitments are planned over the next year. A full 80% of SWIFT 2’s acquisitions have been direct transactions carried out by SWEN CP without intermediaries, bearing witness to the quality of the company’s sourcing and solid relationships forged with project owners and industrials.

SWIFT 2 is an SFDR Article 9¹ impact fund, whose sustainable investment objective is decarbonization of the gas sector. Since 2021, it has been distinguished by the Greenfin label, a guarantee for investors seeking to contribute to financing the energy transition. The launch of SWIFT 3 is due to be announced shortly.

¹ Regulation (UE) 2019/2088 Sustainable Financial Disclosure Regulation on the publication of sustainability information by financial services providers.