Energy Transition Division

Tecpetrol’s Investment Fund: accelerating the transition to clean energy

TechEnergy Ventures is a corporate venture capital (CVC) initiative created by Tecpetrol’s Energy Transition Unit, whose remit is to invest in and accelerate the development of disruptive technologies in the areas of carbon management, sustainable lithium extraction, clean power/electrification, and hydrogen and clean fuels.

#4-March 2022
TechEnergy Ventures

The energy transition is taking an increasingly central place on most global companies’ agendas. However, progress in the adoption of cutting-edge, first-of-a-kind energy technologies has been hindered by disjointed regulatory policies, incumbency advantages and limited financing options.

Although the 2000s saw a considerable influx of venture capital investment in cleantech, this dried up as the combination of cheap natural gas was compounded by the financial crisis and the collapse of many high-profile companies. From 2013 to 2015, cleantech venture deal value fell by almost 80%.

Today, thanks to a renewed global agenda for climate change focused on a common Net Zero 2050 objective and the success of renewables such as wind and solar, the cleantech sector is on the rise once again. This time, the outlook is far more promising, with the greater availability of non-dilutive capital, and a first glimpse of consumers willing to pay a premium for green. 2021 was a record year with over 2,200 deals and 40Bn invested in Climate Tech, an eight-fold increase since 2015, of which 14 billion were allocated to the prioritized verticals of the Fund.

Leaving aside the hype and the flood of capital, the Tecpetrol team has outlined a strategy designed to accelerate progress towards the Energy Transition Business Unit’s objectives. “Investing today in early-stage companies will give us an edge when it comes to understanding future energy systems and the business opportunities these offer, putting us in a privileged position to deploy these technologies at scale when they become economically viable,” explains Alejandro Solé, head of the TechEnergy Venture investment team at Tecpetrol.

He explains Tecpetrol’s TechEnergy proposition vis-à-vis entrepreneurs and startups as follows: “With capital today being a commodity, our focus is on becoming the strategic partner of choice. By leveraging the Group’s capabilities, we can provide support as early as right out of the lab, helping to scale technologies to the pilot phase and from there to industrial units. All this at the same time as building a long-term strategic partnership to build assets around these technologies.”, when referring to the technical capabilities, Solé highlighted “With over 30 years in the Group, Marco Tivelli as CTO of the Business Unit, brings the kind of experience and leadership we need to successfully identify and accelerate disruptive technologies”.

“Being able to access the non-dilutive capital and subsidies available in Europe and the U.S. is vital to giving these technologies the acceleration and support they need at a financially viable cost. At the moment, we are developing the internal know-how to help our entrepreneurs achieve this kind of access,” he added. “Most start-up ventures are coming out of years working in the laboratory, so we want to ensure we can provide the commercial feedback they need for their inventions to find a place in an industrial context.”

Solé explains that the TechEnergy initiative seeks to add momentum to actions already under way within the Techint Group, such as Tenaris’s decarbonization commitment which involves a 30% reduction in CO2 intensity by 2030, as well as Ternium’s commitment of 20%. Similarly, Techint Engineering & Construction and Tecpetrol are focusing their Energy Transition Innovation units on the development of sustainable energy transition initiatives. "

Tecpetrol has made a USD 150 million multiannual commitment to provide the initiative with the visibility it needs. “Entrepreneurs put great value on the fact that we are able to participate beyond the first financing round in order to help them follow through with their scaling-up and growth phases,” explained Solé.

Solé also highlighted TechEnergy’s intention to implement an approach based on a “strategic fit as a key driver,” which is fully aligned both with Tecpetrol´s goal of developing Energy Transition businesses and with Techint Group’s decarbonization objectives. The new venture will have the support of a multi-disciplinary team made up of over twenty experienced professionals within the Techint Group’s global network. 

Value Proposition

TechEnergy will accompany entrepreneurs through their entire process, offering financial and professional support for all the phases involved:

  • Pre-Seed/Seed (Proof of Concept): TechEnergy will provide a capital injection of up to USD 1.5 million per project, as well as facilitate access to non-dilutive capital, in addition to providing engineering support to define the minimum technical requirements, basic design and engineering services, and market product fit assessment.
  • Series A/D (Minimum Viable Product): Capital enabling the development to be scaled to a pilot project and beyond, along with engineering assistance to insert the technology in an industrial setting, potentially also including basic procurement, construction and advanced engineering services. It will also offer support when it comes to securing a pilot-scale business case and potential partners.
  • Growth Capital & Technology Deployment: Establish a potential partnership with Tecpetrol’s Energy Transition Division for industrial asset development and financing; full support for Engineering, Procurement and Construction (EPC) services along with project management assistance; support for full asset deployment, either as stand-alone projects, or for use in facilities belonging to the Techint Group companies.

To accelerate high quality origination, TechEnergy Ventures is building an ecosystem of Universities and Accelerator Programs with robust early stage origination networks aligned with the funds Investment themes, as well as with financial investors and CVC´s with similar investment mandates and strategic objectives that are complementary to those of Tecpetrol.

For additional information, please visit the TechEnergy Venture website by clicking here