EIB and SaarLB drive renewable energy development with support from Juncker Plan

The European Investment Bank (EIB) and Landesbank Saar (SaarLB) are promoting the development of renewable energies in France and Germany. On Wednesday, the EU bank and SaarLB signed a €70 million guarantee agreement giving the latter additional scope for investing in renewable energies. The agreement states that the EU bank will guarantee a maximum of 50% of the value of up to ten of SaarLB's existing loans for wind and solar power projects in France and Germany. This partial risk participation will help SaarLB to grant additional loans of almost €140 million for new renewable energy projects in France and Germany.

This transaction is the second tranche of a €150 million guarantee framework between the EIB and SaarLB, with the first EIB guarantee for €80 million signed two years ago. This made it possible for SaarLB to provide seven additional loans for wind power projects totalling over €160 million. The EU bank is able to cover the risks on SaarLB's projects because it is itself partially guaranteed by the European Fund for Strategic Investments (EFSI). EFSI is the central pillar of the Investment Plan for Europe (IPE) - also known as the Juncker Plan - under which the EIB and the European Commission are working together as strategic partners and the EIB’s financing operations are boosting the competitiveness of the European economy.

European Commission Vice-President for the Energy Union Maroš Šefčovič said: "The clean energy transition will only succeed in Europe if we think beyond national borders and work together. SaarLB is doing precisely that by financing renewable energy in Germany and France. I am pleased that the EU is able to contribute through the EIB and the European Fund for Strategic Investments. This is something we are also set to encourage under the next EU budget 2021-2027. By pooling various instruments, we aim at leveraging further investment, notably from the private sector, and at boosting the strategic uptake of renewable energy technologies."

EIB Vice-President Ambroise Fayolle, responsible for operations in Germany and France as well as for EFSI, said the following in Luxembourg: “Climate action is one of the EU bank's top priorities, and of all international financial institutions worldwide, we are the biggest financier of climate action projects. We apply modern and innovative financing techniques such as this one, where we are partly taking on the direct financial risk of SaarLB's loans for the first time while leaving risk management and mitigation to them. This is made possible by the support of the European Fund for Strategic Investments and our partnership with SaarLB, with which we have been working very closely, constructively and successfully for many years.”

For SaarLB, Frank Eloy, member of the board of management, emphasised that “the financing of projects relating to renewable energies has been an important area for SaarLB for years. To date we have focused on financing medium-sized projects relating to wind and solar energy in France and Germany. As part of the ongoing development of our business model in this core business area for the bank, we will expand our range of services to financing geothermal projects as well as possibly to Belgium and Luxembourg. The expansion of the EIB guarantee framework is a significant and important component so that we can continue to sustainably support our partners with projects relating to renewable energy in the long-term. A lively example of successful cooperation that benefits all of the partners.”

Background

European Investment Bank

The European Investment Bank (EIB) is the long-term lending institution of the European Union, owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

SaarLB

SaarLB is a Franco-German regional bank with cross-border knowledge of markets, business practices and legal norms. Its roots lie in Saarland (and its surrounding areas in Germany) as well as in neighbouring France, particularly in the industrial north-east.

Investment Plan for Europe

The Investment Plan for Europe, (the Juncker Plan) is one of the EU's key actions to boost investment in Europe, thereby creating jobs and fostering growth. To this end, smarter use will be made of new and existing financial resources. The EIB Group is playing a vital role in this investment plan. With guarantees from the European Fund for Strategic Investments (EFSI), the EIB and the European Investment Fund (EIF) are able to take on a higher share of the risk in projects, encouraging private investors to participate in these projects. EFSI was initially intended to mobilise investment of €315bn throughout the EU over a period of three years until mid-2018. In December 2017, the European Parliament and Member States reached an agreement to extend the duration of EFSI to 2020 and increase its financial capacity to €500bn. In addition to EFSI, the new EIAH advisory platform helps public and private sector project promoters to structure investment projects more professionally. The investment plan should also create a more investment-friendly EU regulatory environment, particularly in the digital, energy and capital markets sectors.