GIC invests $240m in Arctic Green Energy

The new capital will support expansion in Asia and Europe. To this end, AGE and GIC have formed an alliance to drive the uptake of zero-carbon district heating in both regions, according to a statement.

AGE was founded in 2002 with the aim of exporting Iceland’s expertise in geothermal energy, which produces around 30% of the island nation’s electricity and powers the heating and hot water needs of 87% of the country's housing. Most of its projects are in Asia, reflecting regional interest in non-polluting solutions to growing energy demands.

The company's flagship project, Sinopec Green Energy (SGE), is a joint venture with China’s Sinopec. It was established in 2006. Today, SGE is the world's largest geothermal district heating business with a 35% market share in China, serving more than two million customers. 

In 2018, CITIC Capital and China Everbright committed $100 million in debt and equity funding to AGE. CITIC first invested in AGE in 2015 alongside Kazyna Capital Management, a subsidiary of Kazakhstan’s sovereign wealth fund. The investors formed a JV with AGE as part of China’s One Belt One Road (OBOR) initiative to promote air pollution prevention technology.

“The strategic alliance and funding from GIC will allow Arctic Green Energy to significantly increase its capability and momentum and launch multiple new projects. Taking down chimneys and transforming more cities into healthy living breathing cities is now a real prospect and we look forward to our cooperation with GIC to turn this into a reality,” said Haukur Hardarson, chairman and founder of AGE.

J.P. Morgan acted as placement agent to AGE for the transaction.

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