Cathay Capital Private Equity has gathered 820 million yuan ($117 million) in financing from French energy giant Total and the provincial government of Chinese province Hubei for a fund dedicated to the new energy sector in China.
The fund, Cathay Smart Energy Fund, was announced last year, with Total and Hubei High Tech Fund as its anchor investors. It will invest in emerging technologies and new business models, including renewable energy, energy internet, energy storage, distributed energy, smart energy and low carbon activities. At the time of its launch, the fund was said to target a corpus of 1.5 billion yuan (roughly $250 million).
Shipping company CMA CGM has also invested in the fund, which is the third RMB-denominated fund for Cathay Capital.
Cross-border PE firm Cathay Capital invests in middle-market companies in the consumer goods and services, healthcare, business services and technology industries in Europe, North America, and China. It has more than 2.8 billion euros in assets under management and has completed over 100 buyouts and growth capital investments since its inception in 2007.
“Our investment in the Cathay Smart Energy Fund is in line with Total’s strategy to support innovative carbon-neutral energy solutions. China is leading the world in the field of clean and sustainable energy development and is, therefore, a strategic market for Total Energy Ventures (TEV),” said TEV chief executive Girish Nadkarni.
TEV is Total’s venture capital arm for investing in energy startups. Its portfolio includes companies such as AutoGrid, Stem, Sigfox and OnTruck. One-third of its investments are dedicated to China.
China is expected to remain the world’s largest energy consumer, accounting for 22 per cent of global consumption in 2040, despite slowing energy demand growth in the country, according to a BP report. At the same time, its utilisation of renewable energy is also projected to increase rapidly, rising annually by 8.5 per cent to 2040 to account for 26 per cent of global renewable energy capacity by then.