ESTONIAN RENEWABLES INVESTMENTS

The projects will finance two onshore windfarms in Estonia, as part of Enefit Green's portfolio investments in Baltics.

The aim is to reduce carbon and air pollution emissions, which are externalities the market fails to address. The project will also foster the integration of new, variable renewable generation technologies in the market, thus filling a financing gap in the development of new renewable capacity, with more market-exposed structures and instruments.

This operation concerns the development and operation of two large-scale onshore wind farms that will contribute to the achievement of the 2030 decarbonisation targets set out in the National Energy and Climate Plan (NECP) of Estonia and the REPowerEU action plan. The wind farms are located in a Cohesion Priority Region.

The financing of this project contributes to Bank's lending priority objectives on Renewable Energy, Environmental Sustainability, Climate Action, as well as Economic and Social Cohesion.

In terms of addressing market failures, the onshore wind farms primarily reduce carbon and air pollution externalities. 

The project will rely on revenues from commercial power purchase agreements and the wholesale market. It thereby supports market integration of renewable energy projects. The project is expected to yield quality and results rated as 'very good' under the AIM framework, thanks to avoided GHG emissions, fair employment creation and governance arrangements.

The Bank's contribution will be most visible on the financial contribution side by accelerating the fundraising process and crowding in other financiers. The Bank provides expertise in structuring and lending to renewable energy projects, applying standard and well tested principles. This will improve the structuring of the operation through close co-operation with the promoter and the commercial lenders.

Wind farms fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU (as amended by Directive 2014/54/EU), requiring the competent authorities to determine whether an EIA process is required. The two onshore wind farms have jointly undergone an EIA process in 2015 and received the building permits. Due to its characteristics, the transmission line is also expected to fall under Annex II of said Directive. During appraisal, the EIB will review the EIA report and process, including conditions of the environmental permits. Compliance with EIA Directive 2011/92/EU, Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC will be further appraised in detail. The closest Natura 2000 sites are Ämmamäe (SCI or SAC EE0040368) adjacent to the site, Mõrdama (SCI or SAC EE0040331) adjacent to the site, Kõrissoo (SCI or SAC EE0040321) ca. 1.5 km SW and Taarikõnnu -Kaisma (SCI or SAC and SPA EE0020315) ca. 3 km to NW. The project is expected to contribute to Climate Action and Environmental Sustainability (CA&ES) objectives, in particular to climate mitigation.

The promoter has to ensure that contracts for implementation of the project have been or will be tendered in accordance with the applicable EU procurement legislation, (Directive 2014/23/EU / 2014/24/EU / 2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EEC) as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.