SEIFA creates incentives for private investors

In March 2020, the European Commission laid the foundations for “A new Industrial Strategy for Europe” underpinning the role of Industry in the transformation towards a carbon-neutral economy. The industry accounts for 51% of the total Green House Gas emissions. It has to reduce its carbon footprint and at the same time accelerate the sustainable transition by providing affordable and clean technology solutions.

Public investments alone are not sufficient to undertake this massive challenge and private investments will play a key role in the sustainable transition. The Sustainable Energy Investing and Financing Activation (SEIFA) project will therefore create incentives for private investors to finance modernisation of industrial companies, energy supply facilities, and energy service companies.

The SEIFA project is establishing a Fund that aims to create a Net-zero carbon emission and a fully Environmental, Social, and Governance (ESG) compliant portfolio. Every potential investment will be assessed against rigorous financial and sustainability criteria, following the EU Taxonomy for Sustainable Activities and the Sustainable Finance Disclosure Regulation (SFDR).

The project started in June 2021 with the planned duration of 30 months. The Investment Fund established during this period will be self-sustained for an indefinite time. At least 500 million Euros for sustainable energy projects will be provided during the SEIFA project duration and it is expected that the 5 billion Euro mark will be reached during the five years after the project completion. A wide network of regional and national project aggregators will be established to ensure an appropriate deal flow.

The SEIFA project emphasises the environmental impact in terms of decarbonisation rate and risk-adjusted rate of return. The project measures and evaluates the additional benefits of sustainable energy investments. The investors-first approach, sophisticated risk management, and sustainability reporting will incentivise private investments to carefully selected sustainable projects.

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