The European Investment Bank (EIB) and German Landesbank Saar (SaarLB) signed a €70 million guarantee agreement giving the latter scope for investing in renewable energies, EIB said in a statement on Monday.
The agreement states that the EU bank will guarantee a maximum of 50 percent 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 also in France and Germany,' the EIB said.
According to the statement, this transaction is the second tranche of a €150 million guarantee framework between the two, with the first EIB guarantee for €80 million signed in 2016.
'This made it possible for SaarLB to provide seven additional loans for wind power projects totalling over €160 million,' it said.
EIB Vice-President Ambroise Fayolle, responsible for operations in Germany and France, said climate action was one of the EU bank's top priorities, which he said, was the biggest global 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,' he said.
'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.'
SaarLB's Board Member Frank Eloy underlined that the financing of renewable energy projects had long been 'an important area' for the bank.
'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,' he said.
Eloy added that the expansion of the EIB guarantee framework was 'a significant component' that would enable them 'to sustainably support our partners with projects relating to renewable energy in the long-term'.
European Commission Vice-President for the Energy Union Maros Sefcovic said in the statement that the transition to clean energy in Europe could only succeed through thinking 'beyond the borders' and working 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,' he said.
'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,' he added.
By Gulsen Cagatay
Anadolu Agency
energy@aa.com.tr