EBRD and Eiffel Investment Group Drive Renewable Energy Growth in Romania with €24.4 Million Solar Power Investment

EBRD and Eiffel Investment Group Drive Renewable Energy Growth in Romania with €24.4 Million Solar Power Investment

(IN BRIEF) The European Bank for Reconstruction and Development (EBRD) and the Eiffel Investment Group are jointly providing €24.4 million for the construction of two solar power plants in Romania’s Dolj County. Each organization is contributing €12.2 million to the project, managed by Danube Solar Five, which is owned by Lithuania’s INVL Renewable Energy Fund I. This initiative aims to support Romania’s renewable energy targets and modernize its electricity market. The use of limited recourse construction bridge facilities (CBFs) is highlighted as an innovative financing structure that can attract further investment in the renewable sector. The EBRD’s involvement is expected to encourage other financiers to adopt similar practices.

(PRESS RELEASE) LONDON, 5-Aug-2024— /EuropaWire/ — In a significant move to accelerate the development of renewable energy in Romania, the European Bank for Reconstruction and Development (EBRD) is extending a €12.2 million limited recourse construction bridge facility for the construction of two solar power plants in Dolj County. This financing is matched by an equal investment from the Eiffel Investment Group, bringing the total funding to €24.4 million.

The borrower, Danube Solar Five, is a special purpose vehicle based in Romania and owned by Lithuania’s INVL Renewable Energy Fund I, which is managed by UAB INVL Asset Management (INVL). With over three decades of experience and more than €1 billion in assets under management, INVL’s portfolio spans real estate, energy, and infrastructure across the Baltics and Eastern Europe.

The solar plants, located in Robanesti and Pielesti, will have a combined installed capacity of 60MW. Eiffel Investment Group, an asset manager with €6.4 billion under management, is co-lending the remaining €12.2 million. Known for its strong industrial expertise and commitment to sustainable investment, Eiffel Investment Group is backed by the Impala group, founded by entrepreneur Jacques Veyrat. The firm’s investment strategies aim for both robust financial performance and positive social and environmental impacts, with a team of around 100 professionals located in Paris, Amsterdam, New York, and Abu Dhabi.

This financing initiative aligns with Romania’s commitment to the EU’s Fourth Energy Package, “Clean Energy for all Europeans,” which seeks to modernize the EU electricity market and integrate a greater share of renewables. Romania has significantly improved its regulatory environment for renewables, notably with the full liberalization of the local energy market in January 2021.

The country’s ambition to boost renewable energy production is reflected in its commitment to increase the share of renewables in its total energy consumption from 24.3 percent in 2019 to 36.2 percent by 2030, adding 11.9 GW of new renewable capacity. This goal is part of the broader EU Fit for 55 and REPowerEU plans to enhance renewable energy production by 2030.

The use of limited recourse construction bridge facilities (CBFs) is pivotal in this context. These innovative financing structures help developers manage initial construction and development risks, attracting further capital into the renewable sector, which is essential for meeting the region’s green transition targets. CBFs have been common in Western Europe but are relatively new in Romania, where only one such facility has been financed so far.

Grzegorz Zielinski, EBRD Head of Energy Europe, highlighted the importance of the EBRD’s involvement in demonstrating the viability of CBFs in Romania, encouraging other potential financiers to follow suit.

The EBRD has been a steadfast partner in Romania’s development, with nearly €11 billion invested in 533 projects to date. This latest initiative underscores the bank’s ongoing commitment to supporting Romania’s renewable energy goals and fostering sustainable development in the region.

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SOURCE: EBRD