Taaleri Bioindustry

Established: 2022
Climate Fund investment decision: 5/2022
Funding target: investment into Taaleri Bioindustry I private equity fund
Funding: two-part investment of at most €15 million
Main anticipated impact: fund supports the development of bioindustry and reduces the use of fossil fuels, non-renewable and virgin raw materials in addition to emissions reductions.

The Taaleri Bioindustry I fund supports the development of bioindustry, principally in Finland, with an initial focus on organic fertilisers, recycling technologies, metal recycling, alternative textiles and fabrics, biobased materials and geothermal energy production. Investments in new plants and expansions reduce the use of fossil fuels as well as non-renewable and virgin raw materials.

The Taaleri Bioindustry Fund I is classified as a dark green fund under Article 9 of the Sustainable Finance Disclosures Regulation, or SFDR regulation, meaning that it only makes sustainable investments in projects that, for example, contribute substantially to climate change mitigation.

The target size of the fund is €80 million. As an anchor investor, the Climate Fund will make a two-part investment of at most €15 million into the Taaleri Bioindustry I private equity fund. The Climate Fund will invest €10 million in the first fund-raising period and, if the fund achieves total commitments of €100 million, a further €5 million in the later closing.

According to its strategy, the Climate Fund may consider participation in special investment funds if a type of fund in alignment with the Climate Fund’s goals is being brought to market and the impact is realised, for example, on a significantly larger scale or earlier than it would without the participation of the Climate Fund. Such funds and instruments can include special investment funds set up to solve a specific challenge related to the climate or environment, whose primary goal is to achieve significant emission reductions or other environmental impact.

The Climate Fund’s participation as an anchor investor helps with setting up the fund and thus supports the development of the Finnish bioindustry. The Climate Fund’s funding reaches multiple targets through the Bioindustry I fund, but the Climate Fund retains the possibility to grant funding also directly to the target companies if necessary.

The precise emissions-reduction potential of the fund depends on the number of investments and their distribution over the various focus areas. The emissions reductions will be indirect, that is, they will result from the measures taken by the companies the fund invests in rather than through Taaleri’s own actions. However, all of the fund’s investments are predicted to achieve considerable emissions-reductions compared to alternatives produced with traditional methods. The indicative estimated average annual emissions-reduction potential of the fund is approximately 284 tCO2-eq., which would result in an estimated cumulative emissions reduction of 2.46 Mt CO2-eq. over 10 years if the plans succeed. The emissions reductions would primarily be achieved in Finland and mainly in the emissions trading sector, but also in the effort sharing sector to an extent. The fund may invest in projects in the other Nordic countries or Europe.

In addition to the emissions reductions, the fund has a clear connection to the Climate Fund’s impact criteria of productivity and business potential as well as export potential.