EIB: First financing operation in France in renewable energy sector with an emphasis on wind farms

The European Investment Bank has granted a EUR 100 million loan to Unifergie, a Crédit Agricole subsidiary specialising in the financing of sustainable development. This loan will serve to finance SME ventures in the renewable energy sector, particularly wind farms, and is the first EIB loan of this kind in France. The EIB is drawing on the expertise of Unifergie, which will pass on the advantage of the Bank’s favourable financing terms to its customers.

   This loan meets three of the six priority areas for the EIB, “the bank promoting European objectives”: environmental protection, diversity of energy supplies and support for SMEs, which create jobs.

 This agreement was announced on Monday 28 May 2007 by René Carron, the CEO of Crédit Agricole S.A., and Philippe de Fontaine Vive, EIB Vice-President, at Crédit Agricole’s head office in Paris.

  Renewable energy, a joint priority of France and the European Union  

 The EIB loan is being granted against the backdrop of the Law of 13 July 2005 defining France’s energy policy, which will come into force on 14 July 2007. This law transposes a number of European directives in France, especially the directive of 27 September 2001, which sets the Member States the target of generating 21% of their electricity consumption via renewable energy sources by 2010 (14% in France in 2005). This law establishes new instruments for this purpose, in particular “wind power development areas”.

Over the past five years, the EIB has lent a total of EUR 1.8 billion in support of electricity generation via renewable energy sources in 11 EU Member States: Denmark, Finland, Germany, Greece, Hungary, Italy, Poland, Portugal, Slovenia, Spain and the United Kingdom. Starting in 2007, the EIB has undertaken to lend over EUR 600 million a year towards renewable energy projects.

Background:

Unifergie is a subsidiary of Crédit Agricole Leasing. It has the status of a “Sofergie” (company financing energy-saving schemes) and finances projects that have a sustainable development slant: energy management, environmental protection. The proposed financing solutions are comprehensive, covering personal property, real estate and intangible property.

Projects financed by Unifergie comprise a wide variety of installations: cogeneration plants, wind farms, ventilation installations, boilers, waste sorting, composting and recycling facilities, sewage treatment plants, water networks, etc.

To date, wind power projects financed in this way generate 587 million kwh of electrical power a year, i.e. the equivalent of 235 000 homes’ consumption, thus averting the discharge of 260 000 tonnes of CO2 a year.

The European Investment Bank is the European Union’s financing arm. Established by the Treaty of Rome 50 years ago, it provides mainly long-term loans in support of both private and public sector projects furthering six priority Community policies: economic and social cohesion in the enlarged Union; R&D and innovation; support for small and medium-sized enterprises (SMEs); protecting the environment and promoting sustainable development, trans-European transport networks; and a secure, diverse energy supply. It also implements development aid and cooperation policies outside the EU.

The EIB is autonomous and is not dependent on the EU budget or national taxpayers. It operates like a commercial bank, raising the funds that it lends on the capital markets. Nonetheless, it is guaranteed by the Member States, which enables it to have an AAA rating and offer favourable lending terms. In 2006, it raised EUR 48 billion and lent EUR 45.8 billion in total, of which EUR 39.8 billion within the European Union.