The Finnish Climate Fund’s Board has decided to make an investment of no more than 15 million euros in the Taaleri Bioindustry I fund, which focuses particularly on the development of the Finnish bioeconomy and circular economy. The Climate Fund will invest 10 million euros into the fund in June 2022. This will be followed by a second investment of 5 million euros if the fund achieves a total size of 100 million euros.
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.
”Our Bioindustry Fund is the first private equity fund in Europe to focus solely on bioindustry projects. Furthermore, the fund is one of Finland’s first private equity funds to be classified as dark green, that is, funds under Article 9 of the EU’s Sustainable Finance Disclosure Regulation. The fund only makes sustainable investments in projects that, for example, contribute substantially to climate change mitigation”, says Tero Saarno, Director of Taaleri Bioindustry.
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. Climate Fund’s funding reaches multiple targets through the Bioindustry I fund, but Climate Fund retains the possibility to grant funding also directly to the target companies if necessary.
” The Climate Fund’s participation as an anchor investor helps with setting up the fund and thus supports the development of the Finnish bioindustry. As a dark green fund, Taaleri’s fund is also very well aligned with our own mission of combating climate change, and the climate and environmental impact of the investment targets will be assessed carefully in accordance with our preconditions”, says Climate Fund CEO Paula Laine.
Taaleri Bioindustry I fund
The fund is managed by Taaleri Pääomarahastot Oy, which is part of the Taaleri Group. Taaleri focuses on renewable energy and other alternative investments. The private equity funds managed by Taaleri mainly invest in the renewable energy, bioindustry and real estate businesses Taaleri has 2.3 billion euros of assets under management in its private equity funds and co-investments and has approximately 120 employees. Institutional investors such as the European Investment Bank, European Bank for Reconstruction and Development (EBRD) and the Nordic Environment Finance Corporation NEFCO have invested in Taaleri’s renewable energy private equity funds.
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.
Over its ten-year life cycle, the Bioindustry Fund aims to make 5–7 investments of approximately 10–25 million euros each into scale-ups and facilities of a total magnitude of 20–300 million euros per project. The fund has an initial focus on organic fertilisers, recycling technologies, metal recycling, alternative textiles and fabrics, biobased materials and geothermal energy production.
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 preliminary emissions-reduction potential has been estimated through five model companies, but the fund may also end up investing in companies different from these examples. 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.
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. The first closing was completed in May-June 2022 and the final closing is slated two years from the first closing.
Saara Mattero, Communications Director, the Climate Fund, tel. +358 400 114 777, firstname.lastname@example.org
Tero Saarno, Director, Taaleri Bioteollisuus, tel. +358 50 373 1923, email@example.com
The Finnish Climate Fund is a Finnish state-owned special-assignment company. Its operations focus on combating climate change, boosting low-carbon industry and promoting digitalisation. The Climate Fund invests in large-scale projects in which the fund’s investment is crucial to enable the project’s realisation in the first place, on a larger scale or earlier than it would with funding from elsewhere.
Taaleri is a Nordic investment and asset manager with an emphasis on renewable energy and other alternative investments. We channel capital towards economically profitable undertakings that have a lasting positive impact on the environment and society. We combine capital with talent, expertise, entrepreneurship, and a bold sense of purpose. We are a signatory of the UN Principles for Responsible Investment (UNPRI) since 2010 and joined the Net Zero Asset Managers Initiative in 2021. Our vision is to be a Nordic forerunner in alternative investments focusing on sustainability. Taaleri has 2.3 billion euros of assets under management in its private equity funds and co-investments and has approximately 120 employees. Taaleri Plc is listed on Nasdaq Helsinki.