Germany: EIB finances expansion of energy networks – TenneT to receive EUR 500m loan
9 December 2013
The European Investment Bank (EIB) is providing a EUR 500m corporate loan to TenneT. The funds are being made available in connection with the construction and operation of three offshore high voltage direct current (HVDC) lines that will connect wind farms in the North Sea with the German onshore electricity network. The loan agreement was signed today in Arnhem.
In implementing its energy transition (Energiewende), Germany is focusing on the expansion of offshore wind energy with the aim of the new German coalition partners to reach installed generation capacity of 6.5 GW in 2020. A total of 6.2 GW connection capacity is already installed by TenneT or currently under construction. This makes TenneT one of the main drivers of the German energy transition. Connecting far offshore wind farms in the German North Sea to the onshore grid requires a high degree of research and development. The fact that TenneT is able to provide such worldwide unique projects is a great achievement.
The project planned by TenneT and now being co-financed by the EIB comprises the high-voltage DC lines HelWin1, SylWin1 and DolWin1 connecting offshore wind turbines with a capacity of up to 2.2 GW to the grid. Due to this high capacity and the great distance of the wind farms from the coast, transmission using high-voltage alternating current (AC) is not efficient. Instead TenneT is building and will operate HVDC converter stations of this size for the transmission of high-voltage direct current at sea. Because of its dimension and technical requirements, these projects will be of an exemplary nature not only in Germany but worldwide. Construction has already begun and is expected to be completed in 2014 and 2015.
Wilhelm Molterer, the EIB Vice-President responsible for the Bank’s operations in Germany, said on the occasion of signature: “The Bank sees the expansion of electricity networks as one of its central tasks in the coming years. They are part of Europe’s strategic infrastructure. A key element is the connection of offshore wind farms. This is also playing a decisive role in Germany’s energy policy turnaround. With today’s loan the EIB is also supporting TenneT's pioneering efforts to tackle the special challenges of offshore power transmission.”
Otto Jager, CFO TenneT: “With over EUR 1bn of total funds committed, the EIB has proven to be a reliable and outstanding financing partner for our onshore and now also offshore transmission projects. This transaction highlights the financeability of our offshore investments and therewith our financial solidity.”
The EIB has signed a EUR 250 million loan agreement with TenneT Holding B.V. The financing will be used for the western section of TenneT’s “Zuidwest 380 kV” project, which will enable the transmission of rapidly growing amounts of offshore wind energy to users in the Netherlands and beyond. In its entirety, the Zuidwest 380 kV project also supports increased connectivity of European electricity markets. Specifically, the EIB financing will support the construction of a new 380 kV transmission line – combined with a 150 kV line for part of the route - from the substation at Borssele to a new substation at Rilland.
The European Investment Bank and TenneT have signed the latest contract for a EUR 150 million loan, part of a total EUR 450 million financing to TenneT Holding B.V. agreed in 2011. The financing is provided by the EIB to support construction and operation of 'Randstad 380 kV'; a 83 km 380kV transmission connection in the western Netherlands.
TenneT Holding B.V. and the EIB today closed the issuance of EUR 100 million hybrid capital by TenneT (rated A3/A-). EIB has purchased EUR 100 million hybrid securities to be consolidated and form a single series with TenneT’s hybrid Securities programme launched on 12 April 2017.