France: EUR 500 million finance agreement to upgrade France’s power grid

The European Investment Bank has agreed to participate in the financing of seven high voltage and very high voltage power grid upgrading projects in France over the period 2012-2016. This participation takes the form of a loan totalling €500 million, of which a first tranche of €300 million was signed on Wednesday 20 March 2013 between the EIB and RTE in the presence of EIB Vice-President Philippe de Fontaine Vive, the Chairman of RTE’s Executive Board, Dominique Maillard, and Philippe Dupuis, RTE’s Deputy Managing Director with responsibility for finance, purchasing, IT systems and telecommunications. The second €200 million tranche of the loan will be signed in 2014.

At a time when the EIB is stepping up its support for job-creating projects as a result of its capital increase, this long-term loan provided on attractive terms thanks to the EIB’s AAA rating is vital for RTE. The EIB and RTE are thus continuing the cooperation begun in 2009 which, in particular, paved the way for the financing in 2011 of the new power interconnection between France and Spain.

RTE’s investment programme is expected to run to nearly €8 billion over the period 2012-2016. To implement the selected seven major transmission projects in a number of French regions, the EIB will cover 43% of the investment (€1.2 billion).

Financing these projects will help to ensure the quality and security of supply and enable new generation sources to be connected to the grid, particularly renewables, involving the creation of more than 580 km of 400 kV, 225 kV and 90 kV lines and the upgrading of 275 km of 400 kV lines.

The loan will enable the following projects to be financed in 2013:

• completion of the Cotentin-Maine project, which apart from connecting the EPR to the grid, aims to ensure security of supply in western France and introduce renewables (onshore and offshore wind energy, wave energy) into the power grid;
• securing and upgrading the 400 kV grid connecting Lyon and Montélimar, considered a major project for the security of Europe’s power grid;
• the PACA “power safety net” project, which will give the Provence-Alpes-Côte d’Azur region the same security of power supply as other regions in France.

These projects account for around 70% of the overall investment programme.

EIB Vice-President Philippe de Fontaine Vive welcomed the signature: “This loan demonstrates our commitment to supporting energy in France. Our goal is to develop secure, competitive and sustainable energy. This will involve optimising the quality and security of energy supply while incorporating new power generation facilities, especially from renewable sources. This project will also be a source of employment in the regions concerned.”

Dominique Maillard, Chairman of RTE’s Executive Board, remarked: “The power grid must be extended and upgraded as we move towards energy transition. We need the high-quality financing that the EIB, which knows us well, has been providing to us consistently for a number of years.”