Copenhagen Infrastructure Partners (CIP)’s CI Energy Transition Fund I closed at €3 billion. The fund is targeting transition for hard to abate sectors, focusing on green hydrogen, and was oversubscribed.
CIP launches Energy Transition Fund will provide capital for emerging technologies and infrastructure projects in industrial sectors such as chemicals, agriculture and aviation.
These sectors, known as hard to abate, have power density requirements that make a shift to renewable energy as a pathway to decarbonisation a challenge.
With €3 billion at disposal, green hydrogen and associated technology and infrastructure are set for more rapid deployment. Institutional appetite is growing, with new institutional investors making up 50% of subscriptions to the fund.
Energy transition fund targets green fuels
Copenhagen Infrastructure Partners (CIP) has reached final close on its new fund, CI Energy Transition Fund I (CI ETF I). The fund was oversubscribed and closed at the hard cap of €3 billion. According to CIP, this makes CI ETF I the largest dedicated clean hydrogen fund globally.
The new fund is intended to support the development of next generation renewable energy like Power-to-X. This is where surplus renewable energy is used to generate hydrogen, which is then used for power generation or for use as liquid or gas fuels for hard to abate industrial sectors such as heavy duty road transport, deep-sea shipping and aviation.
Green ammonia is also gaining traction as a primary factor in hydrogen transportation. This week saw the announcement of a major deal in the US, where Uniper is looking to create green ammonia for transportation to Germany.
Other industries to benefit from clean hydrogen/ ammonia include agriculture, chemical manufacturing, and steel production. The fund will also support the integration of renewable power generation in the energy mix through grid balancing.
CIP has estimated that, at full capacity, its portfolio could provide a saving of over 7.5 million tonnes of CO2, through the supply of over 4 million tonnes of green fuels annually.
In May 2022, CIP announced longer term plans to establish a dedicated artificial island in the North Sea for large-scale green hydrogen production. Dubbed ‘Brintø’, CIP anticipate the revolutionary facility could produce up to one million tonnes of green hydrogen per year once at its full capacity of 10GW.
New investors see potential in energy transition
The fund drew in new institutional investors to the order of 50% of the fund, drawn by the trajectories in clean energy infrastructure projects.
Jakob Baruël Poulsen, Managing Partner in CIP said “We are very pleased to welcome a prominent group of existing and new institutional investors to CI ETF I and are delighted that investors share our confidence in and appetite for clean energy infrastructure projects and invest alongside CIP in the next phase of the energy transition.
He continued: “Solutions such as Power-to-X will be key for countries and industries to take the next big leap within reaching the commitments of the Paris agreement and achieving energy independence. As an industry pioneer and one of the global market leaders in greenfield renewable infrastructure investments, CIP is uniquely positioned to invest in this segment.”
Investors came primarily from Europe (~45%), the Nordics (~25%) with Asia Pacific(~20%) and North America (~10%) making up the rest. The fund’s investor base comprises approximately 65 institutional investors.