Arctic Green Energy and GIC have announced a strategic alliance that aims to drive the uptake of zero-carbon district heating in Europe and Asia. Under the agreement GIC will become an equity partner in Arctic Green Energy and commit a substantial new injection of US$240 million to support the expansion of the company in Asia and Europe.

Arctic Green Energy has become a major global player in the sustainable energy transition and the decarbonization of the building sector most recently through the development of the largest and fastest-growing geothermal company in the world, Sinopec Green Energy in China, jointly owned by Sinopec and Arctic Green. Geothermal energy technology is a renewable, economically competitive, and sustainable alternative to the use of fossil fuels for heating and cooling.

Arctic Green Energy’s experience in managing, developing and investing in geothermal and other complementary renewable energy projects provides a platform for rapidly growing geothermal penetration in hard to decarbonize sectors like buildings.

As a new shareholder and strategic partner, GIC will provide substantial capital sources, expertise in transaction capabilities and an international network to support Arctic Green’s expansion, innovation and leadership.

Today, almost half of the global energy consumption is used for heating and cooling in buildings and industry. As climate action reaches the top of the global political and economic agenda, how cities are heated and cooled is now the primary challenge for successful transition to a clean and carbon-neutral world.

National energy policies around the globe, the European Green Deal, and the Paris climate agreement are all creating an opportunity for investment in an energy transition that can simultaneously allow nations around the world to achieve low decarbonization targets while growing their economies.

In an increasingly carbon-constrained world, geothermal energy has emerged as an ideal choice for district heating as it is virtually non-polluting, sustainable, available and provides baseload energy without intermittency. The core expertise of Arctic Green Energy lies in its technical capabilities in using geothermal resources of various temperatures as the backbone for clean heating and power generation, and its integration with other renewable energy sources to create cities free from fugitive carbon and air pollution.

“The strategic alliance and funding from GIC will allow Arctic Green Energy to significantly increase its capability and momentum, and launch multiple new projects,” says Haukur Hardarson, chairman and founder of Arctic Green Energy. “Taking down chimneys and transforming more cities into healthy, living, breathing cities is now a real prospect.”

J.P. Morgan acted as the sole placement agent to Arctic Green Energy for the transaction.