Investing in renewable energies: Capitalizing on the energy transition

The transition to a low-carbon economy is transforming production and consumption patterns over the long term. Renewable energies are at the heart of this structural change, offering investors attractive growth prospects. Combining potential performance with a positive environmental impact, this segment is a strategic component for long-term oriented portfolios.

Buoyed by international climate commitments and the rise of green regulations, the sector is benefiting from massive political and financial support. It is now a significant growth driver for investors looking for diversification and regular returns.

Sustained global momentum

The acceleration of decarbonisation policies, the emergence of new green technologies and the commitments made as part of the Paris Agreement are driving structural growth in the sector. This trajectory is reinforced by the stability of revenues linked to long-term power purchase agreements (PPAs).

A differentiating position in the portfolio

Assets linked to renewable energy offer attractive risk/return characteristics, uncoupled from traditional stock market cycles. Their low correlation with financial markets makes them a stabilising lever for diversified portfolios.

A number of instruments enable investors to expose their capital to the potential of this sector while meeting requirements in terms of yield, liquidity and transparency.

Listed securities and green bonds

Shares in companies active in renewable energy, combined with green bonds issued to finance impact projects, combine direct access to the markets with investment sustainability.

Green-themed investment funds

Specialised funds offer diversified exposure through a selection of innovative companies active in the production, storage or distribution of clean energy. They are aimed at investors seeking a structured, professional approach to management.

Impact private equity

Private equity in renewable energies enables investors to support concrete, innovative projects while gaining access to potentially high returns. Eurazeo offers private equity investment solutions targeting players in the energy transition, selected for their financial strength and measurable environmental impact.

Visibility of revenues and long-term contracts

Energy infrastructure projects are based on business models stabilised by multi-year contracts, guaranteeing predictable revenue streams.

Tax incentives

A number of schemes offer tax breaks (tax reduction, partial tax exemption on capital gains, etc.) for investments in certified funds or socially responsible funds. These levers reinforce the economic interest of sustainable investment.

Like all investments, green assets carry risks:

• Regulatory risk (changes in government subsidies)
• Operational risk (site delays, maintenance costs)
• Market risk (volatility of energy prices)
• Liquidity risk (extended holding period)

Appropriate diversification, rigorous project analysis and the support of an experienced player such as Eurazeo can all help to overcome these challenges.

This article was produced by Eurazeo Global Investor and is for information purposes only. It should not be construed as a solicitation or offer relating to financial products or as legal, tax, financial or any other kind of advice. Readers are invited to contact their own advisors for any analysis relating to the content of this article. The information presented does not claim to be exhaustive. Accordingly, this document alone should not be relied upon in making an investment decision. Please refer to the legal documentation of the funds mentioned before making any final investment decision.

Past performance is not necessarily indicative, nor a guarantee of future results. Information on past investments is provided solely to illustrate the nature of these investments and the related investment strategy and process. There can be no guarantee that the investments made by the funds will produce comparable results, or that the targeted returns will be achieved. Investing in Private Equity/Private Debt funds involves a risk of capital loss and illiquidity.