+++ Prime Capital accelerates infrastructure debt fund to EUR130m with EUR30m EIF commitment, targeting European small- and mid-market opportunities +++

August 20, 2025

Prime Sustainable Infrastructure Debt Fund targets the European small- and mid-market segment, financing independent infrastructure developers and asset owners.
The fund’s size has increased to EUR130m following a renewed investment from the European Investment Fund, which has confirmed a EUR30m commitment.
The fund offers a target return of 9.5% to 10.5% with high quarterly cash yield distributions.
It addresses financing needs for large-scale battery storage investment, among other infrastructure projects, and is classified as an Article 9 fund under SFDR, underscoring its strong commitment to ESG investing.

Prime Capital AG (“Prime Capital”) provides an update on its infrastructure debt initiatives, specifically regarding the Prime Sustainable Infrastructure Debt Fund (“PSIDEF”).

The European Investment Fund (“EIF”) has confirmed a EUR30m commitment to PSIDEF under the InvestEU programme. This strategic investment will provide specialised financing primarily to SMEs active as developers. The fund’s objective is to contribute to decarbonisation, promote energy efficiency, and increase access to inclusive and modern infrastructure.

The European infrastructure debt market offers unique opportunities in the current economic environment, as there remains a significant financing requirement driven by the urgent need to modernise ageing infrastructure and support sustainable urbanisation and economic growth. In 2024, the value of transactions in Europe increased by approximately 20% to USD410bn, compared to USD342bn in 2023. This represents roughly one third of the global infrastructure debt market, according to Inframation. A further acceleration is expected as a result of substantial fiscal packages announced by the German government in the first half of 2025. This very significant pool of financing requirements provides investors with opportunities for stable, largely cash-yielding, predictable and inflation-linked returns, making infrastructure debt a compelling choice for those investors seeking diversification, sustainability and enhanced risk-adjusted returns.

While there is significant demand for financing solutions throughout the entire European infrastructure market, one segment is particularly exposed: independent companies in the small- and mid-market segment. These companies – often local developers and independent power producers that are neither part of larger corporate groups nor supported by private equity – have significant capital requirements due to the high costs associated with infrastructure assets. However, they typically have limited access to a broad range of debt providers. This is mostly because their projects tend to be smaller and more complex, and traditional lenders often require the support of large organisations or financial sponsors, which these independent companies lack.

PSIDEF addresses the financing needs of independent infrastructure developers in this small- to mid-sized market, whose asset owners have generally strong technical expertise and a strong local footprint. The focus of the fund is on assets with robust cash flow generation. The strategy focuses on Continental Europe and the Nordics, anchored by Prime Capital´s expertise in these markets. The Article 9 fund (under the EU Sustainable Finance Disclosure Regulation (SFDR)) offers a target return of approximately 9.5% – 10.5% (gross in EUR), focusing on a high cash yield distribution on a quarterly basis.

The fund recently had its third closing, bringing it to a size of approximately EUR130m.

Andreas Kalusche, CEO at Prime Capital, says: “We are very pleased that we now count six different investors for this fund – insurance companies, pension funds, endowments and family offices – who are particularly attracted by the high cash yield that is generated and who value the additional diversification that we provide. Securing the EIF’s support once again for our funds is an important milestone for us.“

“The EIF’s commitment to Prime Capital combines our two top priorities: securing access to finance for European SMEs and backing meaningful infrastructure projects that contribute to climate action and a greener, more sustainable EU economy. In addition, we are confident about the fund’s risk-return profile, which adds further depth to our cooperation“, said Marjut Falkstedt, Chief Executive Officer of the European Investment Fund.

Current Allocation Focus and Attractiveness of Battery Energy Storage Systems (“BESS”) Assets

BESS projects are currently particularly relevant for the allocation of PSIDEF, as the sub-segment fits well into the strategy in all aspects.

The financing needs in this subsector of the infrastructure debt market are substantial, with only a limited number of lenders active in the segment. While capital expenditures are relatively high, these projects are often easier and quicker to develop compared to traditional solar photovoltaic or onshore wind assets, also because less space is required and there is a lower impact on the environment. This results in the emergence of a high number of new players who face the described financing gap. PSIDEF acts as a growth and strategic partner for these counterparties, allowing them to become long-term asset owners.

As the need for electricity grid stabilisation is growing, e.g. due to the increased share of renewable energy sources additionally contributing to power supply, BESS assets that are already operating on the grid, or those that can reach their Commercial Operation Date very soon, are showing strong profitability and are generating solid revenues. By focusing on assets that can be commissioned within a short period of time, there is an opportunity to use the high income to structure front-loaded repayment schedules and cash sweeps, and thus de-risk these assets comparably quickly.

After successful investments in recent months, Prime Capital is aiming for further deployment into BESS assets with short construction times. The next project is already identified, with targeted closing by the end of the summer.

Commitment to Sustainable Investment and ESG Principles

While PSIDEF was originally launched as an Article 8 product (EU SFDR), following the successful execution of the first transactions and a thorough review of the pipeline, it was upgraded to Article 9, reflecting Prime Capital’s commitment to promoting environmental, social, and governance principles. This step is also supported by the EU’s strong cross-border regulatory framework, such as the Clean Industrial Deal (https://commission.europa.eu/topics/eu-competitiveness/clean-industrial-deal_en), which aims to enhance the competitiveness of Europe’s net zero industry and accelerate the transition to climate neutrality.

Stefan Futschik, Head of Prime Capital’s Private Debt team, comments: “We are convinced that we have managed to find the right balance between supporting the sustainability journey of the EU and investing in attractive opportunities without having to accept lower returns, as our current portfolio proves. Given the current market environment and outlook, as well as our pipeline, we will deploy the additional commitments very soon in attractive investments for the benefit of our investors.”

PSIDEF continues its fundraising, with the final close expected in Q1 2026.

The funds invested by Prime Capital benefit from support from the European Union under the InvestEU Fund.

About Prime Capital:

Founded in 2006, Prime Capital AG is an independent asset management firm and financial services provider, owned by management as well as current and former senior employees. The company takes a holistic, cross-divisional approach and specializes in Alternative Investments, in particular in Absolute Return, Energy Infrastructure, and Private Debt. Furthermore, the company provides Access Solutions for the access to Alternative Investments through securitizations and fund structures. Prime Capital currently employs about 125 people in Frankfurt and Luxembourg and is regulated by BaFin and CSSF.

As of June 2025, Prime Capital has approximately EUR 3.8bn Assets under Management as well as EUR 8.7bn Assets under Administration.

For additional information, quotes or requests please contact:
Prime Capital AG
Andreas Kalusche, CEO
Questions regarding the content please contact Stefan Futschik
Tel: 0049 69 9686 984 307
Stefan.Futschik@primecapital-ag.com
www.primecapital-ag.com

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