Last year, global investment in the low-carbon energy transition hit a record $2.1tn, according to Energy Transition Investment Trends 2025. But, while investment is at an all-time high, growth is slowing – a concerning trend considering a total of $200tn (about $7tn per year) is needed to hit net-zero by 2050, according to BloombergNEF.
Decarbonisation is a sector known well to Infranity – a specialist asset management company with €11bn AUM, formed as a strategic partnership between three Managing Partners and the Generali Group.
The firm’s focus is on investing in established businesses in the mid-market with strong infrastructure fundamentals and development potential, while also facilitating sustainable value.
“As investors, we are convinced decarbonisation plays a significant role in the economy. By driving this transition, we serve the greater good, all while ensuring attractive returns for our investors,” explains Louis-Roch Burgard, Co-head – Equity Investments.
Earlier this year, Infranity acquired a majority stake in Nordic Re-Finance AB (NRF), a rental provider of locomotives. Romain Le Melinaidre, Executive Director at Infranity, describes the acquisition as “ticking a lot of boxes” for the firm.
“The rail sector, and particularly the rolling stock space, has been a long-term area of focus for Infranity. Transport plays a major role in the decarbonisation process, and rail is the most efficient way to reduce the carbon footprint of the sector.”
Transportation accounts for approximately 23% of energy-related CO2 emissions contributing to global warming, with projections suggesting this could rise to 40% by 2030. Since trains produce fewer greenhouse gas emissions compared to other modes of transport, increasing rail usage is considered crucial for reducing overall transportation emissions.
The investment is set to support NRF’s expansion and introduce new solutions for its blue-chip clients. It will also drive progress along the decarbonisation agenda by promoting the growth of rail freight, which is essential for meeting the rising demands of international and national trade through a low-carbon mode of transport.
The business case
So, why is NRF a good investment for Infranity? Very simply, the business fills a gap – and already fills it well.
The European market is under pressure due to high demand for new locomotives, explains Le Melinaidre. Manufacturers can only produce a certain number of locomotives per year, which is not enough to meet market demand. And when they do produce new electric models, the purchase price can exceed €5m for each locomotive – a figure that is out of reach for many potential clients.
In response, NRF has, over the last 15 years, assembled the largest fleet of mid-life locomotives in the Nordics, with a growing presence in Switzerland. The model is to extend the life of high-quality machines, while gradually electrifying its leasing fleet – a cost-effective and green solution to the supply gap.
“Rather than disrupting the supply chain, we’re making things easier by allowing old locomotives to stay in operation and be modernised while waiting for new ones to be produced,” says Burgard.
Due diligence
The business case quickly became clear, with Le Melinaidre noting there was little need for advisors to be convinced of the market demand or the potential to remarket the locomotives.
Still, during due diligence, Infranity had other factors to consider regarding the acquisition’s long-term viability.
Key areas of focus included legal and financial risks, and a significant amount of time was dedicated to verifying the fleet’s condition, assessing the team’s expertise, and aligning interests with management to ensure long-term success.
Through this process, Infranity was able to confirm the team possessed the technical expertise to manage the fleet, acquire locomotives at competitive prices, and secure clients efficiently. Alignment of interests was another aspect of the risk management strategy.
“It was very important that the management team stayed on board with us, and maintained a significant share of the business,” recalls Le Melinaidre. To achieve this, seven-year lock-up periods were put in place.
This reduces the disruption that can ensue in such transactions, he says, enabling business continuity while Infranity develops NRF’s speed and scale.
Achieving change at scale – an example being the decarbonisation of transport – is not something that will happen overnight, explains Burgard. Instead, it’s a long-term investment and something that demands attention from private markets.
“Private equity is possibly the missing link to enable decarbonisation,” agrees Le Melinaidre.
“We’re not replacing public investment; we’re providing the capital and expertise needed to accelerate these transitions.”
