EIF backs Polestar Capital’s sustainable tech fund
Dutch impact investor Polestar Capital has secured €43m (£36.4m) in commitments for its debt fund that supports sustainable technology companies.
The European Investment Fund (EIF) has provided €30m, with the remainder coming from philanthropic housing firm Realdania, regional development agency Oost NL and Polestar Capital itself.
The Polestar Capital Circular Debt Fund (PCDF), which has now reached €240m, is planning to fund 20 to 30 companies that will use the proceeds to establish technologically innovative manufacturing facilities so that production cycles become ‘circular’.
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The fund has clear impact objectives for its investments, such as the reduction of waste and CO2-emissions, and increasing the use of circular and more sustainable materials and products.
The EIF said that the fund addresses a funding gap for sustainable technology companies, as this kind of financing is usually too innovative for banks and too capital intense for venture capital and subsidies alone.
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“Circularity is still an underfunded area when it comes to innovation,” said Marjut Falkstedt, chief executive of the EIF. “We can achieve a lot by better managing resources and products, and integrating circular thinking in our production processes. We’re happy to partner with Polestar Capital and build on their network in this particular field of expertise.”
Daan van Kassel, fund director of PCDF, said: “The expansion of the fund comes at a perfect timing. It can take quite some time to make innovative circular production projects financeable for the fund, and we are now concluding transactions with the companies that we first engaged with in or before 2022. This expansion enables us to start new financing processes with another three to six circular innovators in order to bridge their funding gap when they develop a first production facility at commercial scale.”
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