BURGENLAND ENERGIE SOLAR AND WIND GREEN LOAN

Promoter – Financial Intermediary

BURGENLAND ENERGIE AG

Location

• Austria

Description

The investment programme comprises the implementation and operation of a portfolio of solar PV plants and wind farms in Austria, with an aggregate capacity of ca 1.3GW.

Additionality and Impact

The implementation of the investment programme increases renewable energy generation capacity in Austria and contributes to the 2030 targets set out in the National Energy and Climate Plan of Austria and the REPowerEU Action Plan.

The financing of this project also contributes to Bank's lending priority objectives on Renewable Energy as well as on Climate Action. The project is eligible under InvestEU as per Annex II (1)(a) of the InvestEU Regulation.As the projects will produce electricity from low carbon sources, they will address the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and air pollution (compared to fossil-fuel generation), as per Invest EU Regulation Annex V (A)(1)(b).

The project is expected to rely on revenues from (i) market premiums obtained through a competitive auction, (ii) commercial power purchase agreements and (ii) the wholesale market, thereby the project improves market efficiency and competition.

In terms of project results, the projects are expected to have a positive economic return, considering the economic value of the electricity generated. Therefore, the projects will generate a positive social benefit by generating clean and renewable power at a cost reasonably below the cost of fossil-fuel based alternatives in Austria. On project quality, the projects are supported by fair capabilities / governance of the promoter.

In addition to the quantitative financial advantage to be provided to the promoter and a sizeable loan amount from one single source, the Bank's long-term funding will enable the promoter to enhance its financing structure in line with the long economic lifetime of the assets to be financed.

The Bank's participation and structuring efforts are expected to accelerate the development of the project and closing its financing. The Bank provides expertise in structuring and lending to renewable energy projects, applying standard and well tested project finance principles.

The project would not have been carried out (to the same extent) by the EIB without the InvestEU support.

Objectives

The project is part of the promoter's multi-annual investment programme, comprising the construction and operation of ground-based solar PV installations and wind power projects with a total capacity of ca. 1.3 GW in Austria (Burgenland).

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 620 million

Total cost (Approximate amount)

EUR 1426 million

Environmental aspects

The onshore wind and photovoltaic plants will primarily reduce carbon and air pollution emissions, which are externalities the market fails to address. Moreover, the projects will foster the integration of new, variable renewable generation technologies in the market. The Bank's financing would thus fill a market gap in the development of new renewable capacity. That would include a financing gap for projects that try to develop new capacity with more market-exposed structures and instruments.

Procurement

The European Commission has exempted all contracts which are being awarded to implement electricity generation projects in Austria from the scope of the Utilities Directive. No public procurement is required.

Status

Signed - 27/09/2024