Newheat, a supplier of renewable heat based in Bordeaux, France, has announced the successful acquisition of €30M in funding. This round was led by SWEN Capital Partners through its SWEN Impact Fund for Transition 2 (SWIFT 2) strategy.
Long-standing partners of the company, such as Noria, Bpifrance (through its France Investissement Energie Environnement, or FIEE, sector fund), the Etchart group, and the Holdheat holding company, also contributed to this financing round.
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Funding Usage
Newheat, dedicated to reducing carbon emissions at large industrial sites and district heating networks, plans to use the newly acquired €30M to significantly scale up its operations. The company aims to implement 15 new projects within the next three years across France, involving a total investment of €150M. These initiatives are expected to generate 200 GWh of renewable heat annually.
The funding will also enable the French firm to substantially expand its team, aiming to double its current staff of 45 to around 80 by 2025/2026. This expansion will bolster the business development and operations sectors, as well as enhance support functions like finance and administration.
Over the past eight years since its inception, Newheat has successfully established and managed five plants. This growth trajectory follows previous fundraising rounds of €1.8M and €7M in 2017 and 2021, respectively.
Hugues Defréville, co-founder and Chairman of Newheat, expresses enthusiasm about the deal: “We are thrilled to finalize this deal with our longstanding investors and to bring SWEN Capital Partners into our circle. The trust shown by this key player in the energy transition sector not only acknowledges our efforts but also provides a significant boost to further our business development.”
Addressing the Challenges Solved by Newheat
The role of renewable heat is vital in meeting climate goals and lessening reliance on fossil fuels.
In France, heat generation constitutes 45% of the overall energy demand, with fossil fuels contributing to 60% of this. Reducing carbon emissions in heat production is essential for cutting down greenhouse gases and attaining energy independence. However, this aspect has often been overlooked in energy policies until recent times.
Due to extreme weather conditions, disruptions in energy supplies, and increasing energy costs, there has been a growing emphasis by both public and private sectors on shifting towards renewable heat in recent years.
This is the niche that Newheat aims to fill!
Newheat: Crafting, Constructing, and Managing Renewable Heat Systems
Founded in 2015 by Pierre Delmes and Hugues Defreville, Newheat specializes in innovative decarbonization solutions tailored for significant heat consumers, including large industrial sites and district heating networks.
Newheat’s scope encompasses developing, designing, constructing, financing, and operating projects that integrate waste heat recovery, solar thermal energy, thermal storage systems (both short- and long-term), industrial heat pumps, and renewable resource combustion.
The company, based in France, has honed its expertise in crafting and implementing bespoke decarbonization solutions, with each project comprising heat recovery/production, storage, distribution, and energy supply tailored to the client’s site.
Currently, Newheat operates five sites, with a total capacity of 40 MW. The team, consisting of 45 members, aims to achieve a portfolio representing €1 billion in cumulative investments by 2030. This goal includes delivering 1.5 TWh of renewable heat annually, which would prevent nearly 300,000 tonnes of CO2 emissions each year.
Commenting on the company’s future, Hugues Defréville remarks, “2023 is a critical year for the energy transition in Europe and France. By 2035, renewable heat production is expected to reach 284TWh, meeting nearly 60 percent of demand, according to local authority associations. Since our inception in 2015, this has been our goal, and this fundraising effort will greatly assist us in addressing this challenge on a grand scale!”
About the Investor
SWEN Capital Partners stands out as a prominent figure in sustainable investment, focusing on private equity, infrastructure, and mezzanine debt. The firm manages and advises on assets totaling over €8 billion in cumulative commitments.
Launched in 2021, the SWIFT 2 strategy (SWEN Impact Fund for Transition 2) is a European impact initiative specifically targeting the energy transition. It concentrates on investments in renewable gas infrastructures, particularly in the production assets of biomethane and green hydrogen.
Olivier Aubert, Managing Director at SWEN Capital Partners, comments on the company’s investment strategy: “We firmly believe that renewable heat will be a key component of the future energy landscape. Newheat, with its advanced position and expertise, is undoubtedly one of the primary players equipped to tackle this challenge. We are thrilled to back them in their pursuit of the ambitious objectives they have set.”
