KKR entered a strategic partnership with German energy service provider EGC to drive decarbonization in the real estate sector. 

The investment, part of KKR’s Global Climate Strategy, underscores the firm’s commitment to sustainability and the transition from carbon-intensive assets to green solutions.

EGC, founded in 2021, specializes in decarbonizing heating systems in buildings by planning, financing, and operating central heating units and electricity supply networks. The company currently manages approximately 2 million square meters of real estate across over 100 clients and operates around 800 central heating units.

Under the terms of the deal, EGC’s founding family and existing shareholders will retain a stake in the company while continuing to lead management efforts. Additionally, engineering service provider ITG, a part of the EGC group, is included in the transaction. Former GETEC Group CEO Michael Lowak will join EGC as chairman to support its expansion.

KKR’s investment comes as the EU intensifies its decarbonization policies. Buildings account for 40% of the EU’s energy consumption and 36% of energy-related greenhouse gas emissions. The European Commission aims for all new buildings to be zero-emission by 2030 and for fossil fuels in building heating systems to be phased out by 2040.

Vincent Policard, Partner and Co-Head of European Infrastructure at KKR, highlighted that the firm’s significant real estate holdings make energy efficiency a top priority in its new climate-focused investment strategy. Ryan Miller, Managing Director in KKR’s European Infrastructure team, emphasized the need for innovative solutions and long-term capital to accelerate the energy transition in Germany.

KKR also plans to implement its employee ownership and engagement model at EGC, a framework introduced in 2011 and now in place across 60 of KKR’s portfolio companies, benefiting over 150,000 employees worldwide.