“The information is published in accordance with Article 10 of Regulation (EU) 2019/2088 on sustainability-related disclosure requirements in the financial services sector
For the
Nixdorf Kapital Impact Fund S.C.S., SICAV - RAIF -
CLimate ENdowment Hydropower Fund
The Climate Endowment Hydropower Fund is a climate impact fund, which pursues sustainable investment with a double approach, and qualifies in accordance with Article 9 (2) of Regulation (EU) 2019/2088 on sustainability-related disclosure requirements in the financial services sector.
Achieve sustainable long term, risk-adjusted returns
Target reduction of the overall CO2
For this purpose, the fund will invest in climate friendly, small to medium size hydropower plants primarily across Europe with low environmental impact and attractive risk-return investment characteristics. Hydropower plants are critical infrastructure in the transition to fossil-fuel-free, clean energy, with base load and peak load capacity.
The goal of the CE Hydropower Fund is a pure hydropower fund that focuses on creating a portfolio of crisis-resistant infrastructure investments with solid annual cash flow generation. The Fund seeks, over time, through the acquisition of small and medium-sized hydropower plants, a portfolio of institutional-sized hydropower plants at attractive acquisition prices. The aim is to achieve a balanced risk profile thanks to a mix of brownfield and greenfield investments with a maximum of 50% invested in the construction of greenfield projects.
In line with the fund’s investment policy, the focus is on the following United Nations Sustainable Development Goals (SDGs):
UN SDG 7
UN SDG 9
UN SDG 12
UN SDG 13
Methods used to assess, measure and monitor the ecological or social characteristics, including data sources
The financial advisor and its service providers filter, analyze and evaluate potential brownfield investments and greenfield projects based on the fund investment mandate and risk-return strategy. The investment team works closely with the risk management and impact team to carry out exhaustive due diligence on stringent criteria, based on sustainable investment guidelines laid out by the IFC (International Finance Corporation) and the IHA (International Hydropower Association) that any required impact, financial and technical reviews are applied and thoroughly assessed with the data available at this point. Plants with high potential are submitted to the investment committee for approval by Greenlight. This is a preliminary check of the risk/return attractiveness and environmental impact of the plant by the IC members and the Impact Officer.
The team uses checklists, which are regularly updated with global experts, to monitor sustainability goals and ensure that the ESG and impact strategy is achieved in line with our company’s core values.
Due Diligence
During this phase, possible investments and projects are examined in detail for all relevant financial, commercial, legal, climate and environmental, social and technical aspects. The review is carried out by external specialized consultants, depending on the most important risk and investment-relevant areas identified, e.g. financial and accounting audits, technical audits, legal audits and the environment and sustainability, and evaluated by the investment advisor.
Every new opportunity of the CE Hydropower Fund must meet the DNSH criterion (Do-No-Significant-Harm) at the time of the investment decision. The DNSH examines whether an investment or activity in connection with an investment leads to an unacceptable impact on the other UN sustainability criteria. The Climate Endowment Impact Team conducts the DNSH test based on the taxonomy of the European Union for the identification of environmentally friendly and sustainable activities.
The CE Hydropower Fund aims to comply with the provisions of the Climate Transition Benchmark (EU CTB) for the assets contained in the fund by comparing them with the carbon intensity of the EU energy mix published by the European Environment Agency (EEA). Every investment by the Climate Endowment Hydropower Fund aims at at least 50% less CO2 emissions per kW / h produced than the CO2 emissions per kW / h of the EU-27 average (source: European Environment Agency (EEA) greenhouse gas intensity of the 27 EU member states) to meet the requirements of the taxonomy of the European Union for the identification of environmentally friendly (‘green’) activities. According to a study by the Federal Environment Agency in Germany, river hydropower plants generate CO2 equivalent. of 2.702 g / kWh CO2 in power generation. With data as of 2019, small and medium-sized hydropower plants produce 99% less CO2-eq. per kW / h than the EU-27 power generator mix.
EU 27 CO2 intensity in 2019 according to the EEA is 281 g CO2e / kWh and according to the study by the Federal Environment Agency in Germany, hydropower plants generate 2.702 g CO2e / kWh or 0.96% of the CO2e emissions per generated energy unit of the EU 27 electricity generator mix.)
Individual assets are responsible for <1% of the total CO2 emissions in the EU energy mix. In order to ensure an additional reduction in CO2 emissions in the EU-28 energy mix, the fund integrates up to 50% greenfield projects into its portfolio.
The Climate Transition Benchmark is aimed at reallocation capital towards a low-carbon and climate resilient economy. Climate Endowment utilizes this benchmark as its aligned with the GHG emissions sought after in the long-term global warming target of the Paris Climate Agreement.