EIB Launches €5 Billion Initiative to Boost Wind Energy Sector with Deutsche Bank Partnership

EIB Launches €5 Billion Initiative to Boost Wind Energy Sector with Deutsche Bank Partnership

(IN BRIEF) The European Investment Bank (EIB) has initiated a €5 billion program to support the wind energy sector, starting with a €500 million counter-guarantee to Deutsche Bank. This will enable Deutsche Bank to issue up to €1 billion in guarantees for new wind projects, aiding the expansion of renewable energy in Europe. This initiative is part of the EU Wind Power Package, aimed at accelerating the green energy transition and strengthening the wind energy supply chain. The EIB-Deutsche Bank collaboration is expected to trigger private investments of up to €8 billion, supporting the EU’s goal of achieving a 45% renewable energy share by 2030.

(PRESS RELEASE) LUXEMBOURG, 31-Jul-2024— /EuropaWire/ — The European Investment Bank (EIB) has launched a €5 billion initiative to support the wind energy industry, beginning with a €500 million counter-guarantee to Deutsche Bank. This move is part of a broader effort under the EU Wind Power Package to accelerate the green energy transition across Europe. With this counter-guarantee, Deutsche Bank will be able to issue up to €1 billion in advance and performance bonds to support the construction of new wind projects.

This initiative is the first under the EIB’s December 2023 plan to strengthen the wind energy supply chain by providing commercial bank guarantees. The EU Wind Power Package, introduced by the European Commission in October 2023, aims to maintain a competitive and healthy wind energy sector within the EU. The EIB’s counter-guarantees help mitigate the credit risks faced by commercial banks, facilitating access to financing for wind energy companies.

EIB Vice-President Nicola Beer highlighted the importance of rapidly expanding wind power for decarbonizing the economy. She emphasized that this partnership with Deutsche Bank promotes renewable energy expansion, reduces sustainable energy costs, and supports job creation in Europe’s competitive industry.

Deutsche Bank will use the EIB’s counter-guarantee to provide banking guarantees to wind-energy manufacturers. This will enable these manufacturers to secure advance payments and performance guarantees for new wind projects, pay their suppliers upfront, and enhance their capacity to handle large-scale projects. The EIB-Deutsche Bank €1 billion guarantee facility is expected to stimulate private investments of up to €8 billion.

Alexander von zur Muehlen, CEO of Asia Pacific, Europe, Middle East & Africa (EMEA) and Germany at Deutsche Bank, stressed the importance of massive investments, collateral, and guarantees for the energy transition. He highlighted that partnerships between public and private sectors are essential for financing digital and sustainable transformations.

The wind-power sector, despite its success, faces challenges such as uncertain demand, slow project permitting, supply-chain bottlenecks, high inflation, and international competition. The EIB-Deutsche Bank agreement demonstrates how risk-sharing instruments can address these challenges and ensure financing for green transition projects. The initiative aims to significantly increase wind energy capacity, contributing to the EU’s target of a 45% renewable energy share by the end of the decade.

Maroš Šefčovič, Executive Vice-President for the European Green Deal, emphasized the necessity of a strong clean tech manufacturing sector for a successful clean energy transition. Kadri Simson, Commissioner for Energy, noted that wind energy is crucial for Europe’s renewable energy targets and that supporting equipment manufacturers is key to advancing the green transition while maintaining competitiveness and green jobs.

By enabling the construction of up to 32 GW of wind capacity, this initiative plays a vital role in achieving the EU’s ambitious renewable energy goals.

Background information

The EIB Group is the long-term lending institution of the European Union. It finances sound investments that contribute to EU policy objectives and works closely with other EU institutions and bodies to advance shared priorities such as equitable growth and a just transition towards climate neutrality. The EIB Group signed a total of €88 billion in new financing in 2023, of which €8.6 billion in Germany.

All new projects financed by the EIB Group are in line with the Paris Agreement. Investments in fossil fuels that do not reduce CO2 emissions are not eligible for financial support. The EIB Group is on track to deliver on its commitment to support €1 trillion in climate action and environmental sustainability investment in the decade to 2030, as pledged in its Climate Bank Roadmap. Over half of the EIB Group’s annual financing signed supports projects that directly contribute to climate change mitigation and adaptation, and to a healthier environment. Approximately half of the EIB’s financing within the European Union goes to cohesion regions, where per capita income is lower, promoting inclusive growth and the convergence of living standards.

The European Commission presented the European Wind Power Package in October 2023 to tackle the unique set of challenges faced by the wind sector, including insufficient and uncertain demand, slow and complex permitting, lack of access to raw materials and high inflation and commodity prices, among others. In a specific Action Plan, the Commission set out a set of initiatives concerning permitting, auction design, skills and access to finance to ensure that the clean energy transition goes hand-in-hand with industrial competitiveness and that wind power continues to be a European success story.

Deutsche Bank offers a wide range of financial services – from payment and credit transactions to investment advice and asset management, to focused capital markets services. It serves private clients, SMEs, corporations, the public sector and institutional investors. Deutsche Bank is the leading bank in Germany with strong European roots and a global network.

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SOURCE: European Investment Bank