Arverne Group: Geothermal Growth and Policy Tailwinds Fuel Investment Upside

France's energy transition is entering a critical phase, driven by stringent carbon neutrality targets and regulatory reforms aimed at accelerating renewable energy adoption. Among the beneficiaries of this shift is Arverne Group (Euronext: ARVEN), a geothermal specialist positioned to capitalize on policy-driven growth and near-term project catalysts. With its dual focus on scalable geothermal solutions and lithium by-product synergies, Arverne stands out as a key player in France's push for energy sovereignty and decarbonization.

Policy Tailwinds: Regulatory Shifts Create Geothermal Momentum

Recent French policies have prioritized geothermal energy as a cornerstone of low-carbon infrastructure. The France 2030 plan, allocating €8 billion to energy innovation, explicitly supports advanced geothermal systems (AGS) and underground resource utilization. Key reforms include:
- Streamlined permitting for renewable projects under a 2022 draft law, reducing bureaucratic delays.
- Amended feed-in premium (FIP) rules allowing developers to sell electricity at market prices during construction, improving cash flow for projects like Arverne's.
- Enhanced scrutiny of foreign investments in renewables, reinforcing France's strategic control over critical energy assets.

These measures align with Prime Minister Bayrou's emphasis on geothermal as a complement to nuclear energy, signaling a structural shift toward diversified low-carbon solutions.

Project Pipeline: Scalability and Diversification

Arverne's Q3 2025 catalysts revolve around two transformative projects, showcasing its technical expertise and strategic positioning:

1. CDG Airport Geothermal Doublet
2. Scope: Arverne Drilling Services is constructing a 1,800-meter-deep geothermal doublet to supply Terminal 1 with 80 GWh/year of heat—equivalent to powering 10,000 households.
3. Significance: This project underscores geothermal's role in decarbonizing large infrastructure. The use of advanced drilling tech from Herrenknecht Vertical ensures efficiency and scalability for future deep-geothermal ventures.

4. Timeline: Drilling completion in Q3 2025 will trigger operational milestones, with carbon savings expected to bolster ADP Group's sustainability credentials.

5. E.Leclerc Frouard Supermarket Geothermal System

6. Scope: France's first commercial-scale geothermal deployment at a 22,000 m² supermarket, using 53 shallow wells (150 meters deep) beneath a parking lot.
7. Significance: This project sets a replicable model for retail decarbonization, leveraging underutilized urban spaces. It aligns with E.Leclerc's broader ESG goals, including EV charging stations and solar integration.
8. Timeline: Drilling concluded in June 2025, with full system rollout anticipated by year-end.

Competitive Advantages: Lithium Synergies and Energy Sovereignty

Beyond geothermal heat, Arverne's Lithium de France subsidiary unlocks a secondary revenue stream. Geothermal brines often contain lithium, which can be extracted as a by-product—a process Arverne is refining. This synergy addresses France's strategic need to reduce reliance on imported lithium for EV batteries, enhancing energy sovereignty.

The company's workforce incentives—including local job creation (75+ roles at CDG alone)—also align with government priorities, reducing execution risks and securing political support.

Data-Driven Catalysts: Near-Term Upside Potential

• Stock Performance: Arverne's shares have underperformed sector peers amid macroeconomic volatility. A highlights undervaluation relative to growth prospects.
• Policy Announcements: Q3 2025 is critical, with expected updates on France's 2030 targets and potential tenders for geothermal lithium projects.
• Project Milestones: CDG and E.Leclerc completions will validate Arverne's technical execution, attracting institutional investors.

Investment Thesis: Buy on Near-Term Catalysts

Bullish Case: Arverne's projects are de-risked, with partnerships (E.Leclerc, ADP) and government backing. Geothermal's baseload reliability and lithium by-product potential create a moat against competitors. A could reveal its competitiveness in France's energy mix.

Risk Factors: Permit delays, lithium extraction costs, and global commodity price swings. However, France's regulatory tailwinds mitigate these risks.

Conclusion

Arverne Group is uniquely positioned to benefit from France's energy transition, combining scalable geothermal solutions with lithium synergies. With Q3's project milestones and policy updates likely to drive revaluation, investors should view dips as buying opportunities. As geothermal transitions from niche to mainstream, Arverne's leadership in underground resource utilization may unlock outsized returns.

Final thought: In the race to decarbonize, those who control the earth's heat control the future.