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AFM to bring ‘unprecedented’ Euro energy transition market growth Down Under

By Jessica Penny
2 minute read

AFM Investment Partners has teamed up with German renewable infrastructure specialist KGAL to establish a local Australian feeder fund, enabling domestic investors to access KGAL’s two impact funds.

Both impact funds – KGAL’s renewable energy fund and energy transition fund – invest in pan-European real assets along the renewable energy production value chain and green hydrogen opportunities.

KGAL noted that Australian wholesale investors can participate in Europe’s “unprecedented” energy transition growth market while diversifying their portfolios.

“The European market for renewable energy generation and green hydrogen offers growth and diversification potential for Australian investors,” commented AFM’s managing director John Donovan.

“In addition to regional and technological diversification, the KGAL fund combines the acquisition at different asset life stages and multiple offtake schemes,” Donovan added.

“The focus is always on a balanced risk-return profile for institutional investors. The Vasco feeder fund offers tailored access for Australian investors.”

Namely, KGAL’s renewable energy fund targets investments in solar PV and wind projects across Europe, having already allocated 85 per cent of its 334 million euro in equity within two years of the fund’s launch.

The capital is spread across three investments in project developers, and 10 projects at various stages of development throughout Europe.

Florian Martin, co-chief executive officer of KGAL, commented: “Our portfolio stands for high visibility, with the vast majority of the fund’s assets having already been allocated.

“Thanks to the strong performance of our previous investments, we were able to significantly exceed our original return expectations and raise our target to a double-digit percentage return (net IRR). This validates our Core+ investment strategy,” Martin added.

Meanwhile, KGAL’s energy transition fund focuses on hydrogen infrastructure projects in the European Union and the UK, with its first investment being in a hydrogen-based eFuel production facility in Vordingborg, Denmark.

According to the infrastructure specialist, from mid-2026, the plant is expected to produce approximately 68,000 tonnes of climate-neutral sustainable aviation fuel (SAF) per year using self-produced green hydrogen.