UAE-based Vortex Energy closes $200M for its flagship Fund to invest in renewable energy and support global clean energy transition
While fossil fuels were formed 360 million years ago, we’ve only been using them for fuel for a fairly short period of time – just over 200 years. The world has a limited amount of fossil fuels and very soon, we will soon run out of fossil fuels.
It’s estimated that all the world’s known oil deposits will be gone by 2052 and all our fossil fuels will be depleted by 2060. That’s why governments and organizations around the world are looking for sustainable and alternative energy sources like renewable energy like solar and wind to keep the world energy supply going for centuries to come. These companies are also investing in new technologies to fight climate change and global warming.
One of these companies is Vortex Energy, a global renewable energy platform managed by the private equity arm of EFG Hermes. Founded in 2015, Vortex Energy has been successfully pursuing renewable energy investments, completing the full cycle of investment and divestment of c. 822 MWs of wind and solar energy assets in Europe.
Today, Vortex Energy announced it has closed a $200 million (including a USD 25 million conditional commitment) for its flagship fund ‘Vortex Energy IV,’ to invest in the global energy transition. The fund was supported by EFG Hermes and Abu Dhabi sovereign institutional investors and family offices, among others.
As of the end of 2020, Vortex had already aggregated, managed, optimized, and divested an 822MW European portfolio of wind and solar assets through various investments amounting to approximately EUR 1.3 billion, spanning the UK, Spain, France, Portugal, and Belgium. Currently, Vortex has a full operational asset management team based in London and a new office in ADGM, where the investment team shall be located.
In 2020 alone the renewables share of all annual power capacity additions reached 82% compared to 15% a decade earlier. We are seeing today a wide range of investment opportunities that cater to the growing demand for sustainability and increased political and economic drive to support clean energy transition.
Commenting on the investment, Karim Moussa, Head of Private Equity and Asset Management at EFG Hermes and CEO of Vortex Energy, said: “We are very excited about the launch of Vortex Energy IV; the global opportunity is clear and tangible, with renewable energy becoming mainstream. We expect with more net-zero policies and major decarbonizing initiatives to see additions in renewable energy generation of c. 2 TW and investments of c. USD 3 trillion by 2030 globally. I am confident that with our track record of deploying more than USD 1.6 billion in European assets and returning double-digit IRRs, we will be able to grow a substantial asset base for our fund investors. We are also excited to continue building our business and investor base to reach our target size for the fund of USD 750 million within the coming two years.”
“We will employ an active investment strategy for Vortex Energy IV, looking to support developers and independent power producers (IPPs) to reach their full potential, in addition to investing in operating assets in countries that offer attractive returns. The landscape is changing and energy transition investments are becoming more complex compared to traditional assets with long-term contracted cash-flow profiles. With our skillset and experience, I am confident that we have the tools in place to gain a further foothold in the industry. We are already looking at a very interesting pipeline of deals and companies worth c. USD 2 billion in Europe and the US,” Bakr Abdel-Wahab, CIO of Vortex Energy said.