Edinburgh-based private equity house Corran Capital nets stake in major heat infrastructure player

Funding billed as looking to help scale up pace of decarbonisation, and create more green jobs.

Vital Energi's Queens Quay Heat Pump scheme in Clydebank designed to take heat from the River Clyde and use it to warm up local homes and businesses. Picture: contributed.

An Edinburgh-based private equity firm focused on clean energy and backed by Perth-based power giant SSE has raised a new £80 million fund and acquired a major slice of a heat infrastructure company that has assets in locations including Glasgow and Clydebank.

Corran Capital, the brainchild of Gary Le Sueur, formerly a partner at investment vehicle Scottish Equity Partners, has bought the 30 per cent stake in Blackburn-based Vital Energi that develops and delivers heat networks, with backers of the deal including major institutional investors like Strathclyde Pension Fund and Lexington Partners, said to represent more than $30 billion (£23.6bn) in assets globally.

Vital Energi is credited with having connected more than 100,000 homes to heat network schemes, including in Glasgow, Manchester, Liverpool, Leeds, Hull and London, working with local authorities and housing associations to tackle fuel poverty, and it has 700 employees, with offices also including the Scottish city. Its assets include the Queens Quay Heat Pump scheme in Clydebank designed to take heat from the River Clyde and use it to warm up local homes and businesses.

The new investment is expected to enable the firm to rapidly scale as an owner and operator of low-carbon heat networks, and comes amid requirements for all buildings and developments to connect to such infrastructure where available. It is in addition targeting new markets, moving into related technologies including solar, battery and heat storage, and charging electric vehicles.

Corran said it will work closely with Vital Energi’s management to help deploy further institutional capital to accelerate the delivery of low-carbon generation, infrastructure and energy-efficiency services across the UK in private and public sector properties. Additionally Corran has appointed Lucy Graham – formerly with private equity group Cairngorm Capital and in leverage finance with Virgin Money – as a partner to support Vital Energi and its investment and expansion plans, and Le Sueur’s firm said it expects to make additional hires in the next year to strengthen its support to the Blackburn-based firm.

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Le Sueur said: “We are excited to partner with the Vital Energi team to capture the significant growth opportunities in renewable heat and accelerate the broader energy transition. It is a long-term journey and will require substantial amounts of capital – both private and public sector – over the next 50 years. Vital Energi is in pole position with its expertise and skills to play a critical role in delivering important renewable heat and energy efficiency solutions for its customers across the UK.”

Gary Fielding, founder and chairman of Vital Energi, said: “This investment will enable Vital Energi to play an even greater role in tackling climate change while delivering affordable energy for homeowners and building occupiers. We want to build on our existing client relationships and develop new low-carbon infrastructure projects to scale up the pace of decarbonisation, and provide more green jobs for the future.”

Corran has already backed Renewco Power, a solar, wind and battery storage company formed by the firm in 2021 with the backing of SSE, the FTSE 100 clean energy company that committed £48m to Corran’s first fund.