Clean energy tech startup Aira announced today that it has secured €200 million in debt commitments from BNP Paribas, aimed at facilitating the installation of heat pumps in homes across Germany.

Founded in 2022 by impact company builder Vargas, Stockholm, Sweden-based Aira provides clean energy-tech solutions aimed at accelerating the electrification of residential heating, including a high-efficiency heat pump.

Heat pumps are rapidly emerging as a key energy efficient and climate-friendly alternative to furnaces and air conditioners, producing fewer greenhouse gas emissions and reducing reliance on fossil fuels. The European Commission Joint Research Center reports that there are nearly 90 million residential fossil fuel-based boilers in use. Aira said that switching from a gas boiler to an air source heat pump with its clean energy solution can reduce household heating costs by up to 40% and CO2 emissions by 75%, rising to 100% if fossil-free energy is used as the source of power for the heat pump.

According to Aira and BNP Paribas, the new commitment pioneers a new asset class for heat pump securitization, aimed at helping address the upfront cost barrier to consumers to transitioning to heat pumps. Aira said that it plans to use the €200 million to install heat pumps at low or no cost to consumers and recoup the money through low monthly payments.

Eirik Winter, CEO of BNP Paribas Group Nordic region, said:

 “Clean and affordable home energy solutions is a crucial component in the transition to an inclusive net-zero economy.  We are pleased to support Aira on this important initiative to accelerate heat pump adoption and the energy shift. This partnership not only aligns with our strategic goals of fostering sustainable investments but also represents the opportunity to develop an innovative asset class in Europe.”

The new financing follows a €145 million Series B capital raise by Aira earlier this year, aimed at supporting the company’s initiatives, including expansion across Italy, Germany, and the UK, introducing an affordable monthly payment model for European homeowners, and growing its clean energy product portfolio.

Martin Lewerth, Aira Group CEO, said:

“With substantial debt financing facilities from partners like BNP Paribas, we are set to remove one huge barrier to heat pump adoption and turbocharge our rollout across Europe. This securitisation with BNP Paribas marks the first step in Aira’s consumer financing journey and represents a major leap towards moving Europe off fossil fuel-based boilers.”