(Bloomberg) -- The alternative investment firm majority owned by French billionaire Jacques Veyrat is expanding its presence in the market for biomass, which it sees as a key plank in the energy mix needed to achieve net zero greenhouse-gas emissions.
Eiffel Investment Group, which oversees roughly €6.5 billion ($7.3 billion) of assets, said on Tuesday that Dall Energy, a Danish company held in its Eiffel Essentiel fund, will acquire Weiss France Energie and its service unit BSM from the Groupe Roullier for an undisclosed amount.
The Eiffel fund, which has about €400 million of managed assets and targets a return of 25% before fees and costs, says the technology taps into an underutilized corner of the biomass market. Dall has developed large-scale furnaces that generate heat from decaying plant material.
“At Dall Energy, we use a kind of biomass that isn’t used right now,” Thibault Vanpeene, investments director at Eiffel, said in an interview.
Biomass is often referred to as an inexpensive alternative to other fuels in the race to ratchet up the supply of renewable energy. While it may play an important near-term role in speeding up emissions cuts, it’s likely to encounter headwinds by 2050 because of competition from other fuels, according to analysts at BloombergNEF.
Dall Energy reported revenue growth of more than 300% from 2021 to 2023, driven in large part by sales in France, according to Eiffel.
What BloombergNEF Says:
“Biomass is often heralded as a cheap, available option for lower-carbon materials and fuels. But BloombergNEF research shows it can’t compete against unabated processes in any sector and is rarely the lowest cost net zero option. Biomass may still have an important role in accelerating emissions reductions or preserving existing assets in the near term, particularly for steel, cement and fuels. By 2050, it will face strong competition from other pathways.”
Click here for the full report from BNEF’s Julia Attwood.
Founded in 2009, Eiffel is backed by Veyrat’s Impala Group, which holds roughly two-thirds of the company. Investors in the firm’s funds include the French central bank and the European Investment Bank. In July, Eiffel launched the first European impact debt fund, backed by the EIB, to address a sustainable financing gap among smaller businesses.
The fund management industry is exploring all corners of the energy-supply mix as it seeks to identify assets that may be under-invested. That’s as demand for energy is turbo-charged by the rise of artificial intelligence, and the vast data centers that are needed to power its growth.
It’s a dynamic that’s leading to a revival in nuclear power, with Microsoft Corp.’s recent deal with Constellation Energy Corp. to restart the Three Mile Island nuclear plant forcing green energy investors everywhere to take note. Aside from Bill Gates, billionaires throwing their weight behind nuclear power also include Jeff Bezos. And Sam Altman, the chief executive officer of OpenAI, has put at least $375 million into a nuclear startup.
Vanpeene says Eiffel won’t do nuclear investments because such assets can’t be considered renewable.
“It’s not part of our mission,” he said. He also notes that solar and wind are “more mature technologies” than the small modular reactors currently being discussed by investors exploring nuclear. Solar and wind also have the benefit of being “ready to be deployed,” he said.
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