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The operation consists of a line-by-line guarantee agreement with Commerzbank AG for up to 50% of their risk exposure, building on the Growth4Midcap (G4M) guarantee concept. Sub-loans will finance electricity and energy infrastructure (district heating and electrical grid expansion) or public water and telecommunication infrastructure.
The guarantee will enable projects in the sector of electricity and energy infrastructure (district heating and electrical grid expansion) and/or water and telecommunication infrastructure in Germany.
This Growth for Energy (G4E) guarantee operation supports small to medium-scale infrastructure projects aimed at upgrading critical German energy infrastructure, particularly electrical networks and district heating and cooling systems. It addresses the growing investment gap in European energy infrastructure, essential for the European Energy Transition, as highlighted in the EU Clean Industrial Deal, the Affordable Energy Action Plan, and the Grid Action Plan. The project also supports Germany's decarbonisation goals under its National Energy and Climate Plan.
Through Linked Risk Sharing (LRS) guarantees, the EIB assumes part of the credit risk on Final Beneficiaries, enhancing the Financial Intermediary's (FI) lending capacity. This enables greater access to finance for Final Beneficiaries and is expected to have a signalling effect, attracting additional investors. The product is not widely available on the market and offers an alternative way to promote lending to small and medium-scale infrastructure projects.
The FI has a strong track record with the EIB and established relationships with German Stadtwerke (municipal utilities), the Final Beneficiaries, and key project implementers. The operation aligns with the EIB's priorities on Climate Action and Environmental Sustainability and supports REPowerEU objectives. It also contributes to the Bank's Energy Lending Policy, particularly in securing enabling infrastructure.
The project addresses market failures by enhancing energy security and integrating low-carbon generation into district heating networks, reducing emissions and air pollution. It is expected to deliver significant economic and social benefits. The FI is experienced in similar projects and has robust project management systems in place.
The operation falls within the scope of the EIB's Environmental and Social Standards - "Standard 11 Intermediated Finance". The Borrower / Financial Intermediary has adequate capacity, systems and processes in place for identifying, assessing, managing and monitoring environmental, climate and social (ECS) risks related to the potential sub-projects benefitting from EIB support. The Final beneficiaries will be required to comply with applicable national and EU legislation in respect of environmental and social matters, as appropriate.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.