ENERGIEFONDS OVERIJSSEL

Loan to the Energy Fund of the Province of Overijssel for investment in small-scale energy efficiency and renewable energy projects.

The project provides a loan of up to EUR 50 million to the Energiefonds Overijssel (EFO), an evergreen vehicle established and fully financed by the Dutch province of Overijssel. The financing will leverage the province's investment capacity towards projects in the sectors of renewable energy and energy efficiency.

The operation supports the Bank's environmental and climate action objectives, including renewable energy and energy efficiency, and innovation. The operation will also support the decarbonisation targets set out in the National Energy and Climate Plan of the Netherlands. The Bank's participation in ENERGIEFONDS OVERIJSSEL (EFO) as the sole lender offers the Bank a chance to take its experiences and lessons learned, and reach out to a wider market than it would be able to do through direct investments. The targeted market segments lie substantially out of the mainstream of EIB financing in particular for the loan size, and lending through the Fund will offer the Bank an investment channel to borrowers.

The operation will result in increased renewable energy generation and reduced energy consumption.

The project helps to alleviate a funding gap by commercial banks in this segment. It will also addresses the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and air pollution (compared with fossil fuel generation), an unpriced positive environmental externalities. Consequently, the project's societal return is well above the private return.

The quality and results are expected to be very good, backed by very good growth (ERR), a good social benefit as well as governance arrangements.

The investments in renewable energy and energy efficiency projects aim at achieving TeraJoule savings in the province of Overijssel. Projects to be financed by the fund are not expected to have a negative environmental impact. Some projects however may fall under Annex II of Environmental Impact Assessment (EIA) Directive 2011/92/EU, in which case the national competent authority determines whether the projects are subject to an EIA based on Annex III of the directive. During appraisal, the fund manager's environmental and social management capacity and due diligence procedures will be reviewed to ensure compliance with the Bank's standards and the principles of EU environmental directives (including the EIA Directive, Habitats Directive and Birds Directive, Water Framework Directive and Industrial Emissions Directive), as applicable.

The fund's investment guidelines will be required to ensure that procurement procedures applied by the promoters of the underlying investments financed by the fund are in line with the provisions of the relevant directives and the Bank's Guide to Procurement.