Private equity investment in Europe’s cleantech sector appeared set to break records in 2024, driven by a series of significant mega-deals in the first half of the year. According to Pitchbook’s Q2 2024 European private equity breakdown, the total value of cleantech deals in the region reached €15.5bn by the end of the second quarter, marking a substantial step towards surpassing last year’s record of €19.2bn.
By 6 August, the total value of cleantech deals had increased to €15.9bn, according to Pitchbook’s . This figure represented 83% of the previous year’s total, with several months still remaining in the year. If the trend continues, 2024 is likely to become a landmark year for private equity investments in European cleantech, potentially exceeding the previous high of €19.2bn set in 2023. The second-highest year on record was 2021, with €17.7bn invested in the sector, noted Pitchbook.
The heightened interest in cleantech investments was largely attributed to the growing focus on climate change and the energy transition, which have become top priorities for both investors and policymakers. Pitchbook’s report highlighted that general partners (GPs) were increasingly allocating more resources to the cleantech sector to align with environmental, social, and governance (ESG) standards and to attract commitments from limited partners (LPs). The sector’s relative insulation from broader macroeconomic challenges further enhanced its appeal, emphasised Pitchbook.
Although the total deal value in the sector showed significant growth, the number of deals completed told a different story. By 6 August, the deal count, which stood at 75, was only 39% of last year’s total of 164. This suggests that the rise in deal value was primarily driven by a few high-profile transactions rather than a broad increase in deal-making activity, said Pitchbook.
Among the most notable deals of 2024 was Brookfield Asset Management and Temasek’s proposed €3.5bn take-private of the French renewable energy company Neoen in May. If completed, this deal would rank as Europe’s second-largest transaction ever in the cleantech sector. Another significant transaction was KKR’s acquisition of the German solar park operator Encavis, announced in March, valued at €2.8bn.