Private equity investments in the European cleantech sector are on track for a new record, thanks to several large deals in the first half of the year.

According to PitchBook's Q2 2024 European PE Breakdown study, the total value of cleantech deals in the region reached €15.9 billion at the beginning of August. This brings the sector close to breaking last year's record total deal value of €19.2bn, with the second highest value in 2021 at €17.7bn.

The surge in investments reflects the growing attention to climate change and energy transition, which are becoming priorities for both investors and policymakers. Businesses are increasingly focusing on cleaner energy sources, which is not only an important part of the fight against climate change, but also an important competitive advantage that reduces energy costs, increases reliability and improves strategic positioning.

Although the total value of transactions has already reached 83% of last year's record, the number of transactions has only reached 39% of last year's number. This disparity is largely due to several significant transactions early in the year. These include the proposed €3.5bn purchase of French renewables company Neoen by Brookfield Asset Management and Temasek, potentially the second largest cleantech deal ever in Europe, and the €2.8bn acquisition of German solar park operator Encavis PE by KKR.

As climate change remains a critical global issue, governments are increasingly working with the private equity sector to find solutions. In the UK, the government recently established Great British Energy, a state investment body that will work with the Department of Energy and the newly established National Wealth Fund, to which the British Infrastructure Bank has allocated £7.3 billion.