OERSTED - RE-POWER EU FRAMEWORK LOAN

The project consists in a framework loan under the REPowerEU Plan to finance Oersted's investments in offshore wind farms.

By increasing renewable energy generation capacity, the operation contributes to the EU-wide energy targets from renewable energy sources, including RED2 and RePowerEU, as well as to the national renewable energy targets laid out in the German and Polish National Energy and Climate Plans (NECPs). The project supports the EIB's lending priority objectives on Renewable Energy, Climate Action, Environmental Sustainability and partially contributes towards Economic and Social Cohesion (for the percentage of the funds for the Polish wind farms). Moreover, the project provides new generation capacity in a sector characterised by incomplete markets, relying on contracts with exposure to residual market risks. It is therefore expected to also contribute to the policy objective of supporting market integration of renewable energy projects.

The operation entails a framework loan for the development, implementation and operation of offshore wind farms in the EU. The project portfolio increases renewable energy generation capacity and therefore it contributes to the EU-wide targets of energy from renewable energy sources, including RED2, and RePowerEU. It will further contribute to the renewable energy targets laid out in the National Energy and Climate Plans (NECPs).

The operation contributes to Bank's lending priority objectives on Renewable Energy, on Climate Action, Environmental Sustainability as well as partially towards Economic and Social Cohesion (for the percentage of the funds expected to be allocated in offshore wind farms in Poland).

The project portfolio produces electricity from low carbon sources (offshore wind), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and air pollution (compared to fossil-fuel generation).

Moreover, the project provides new generation capacity in a sector characterised by incomplete markets, relying on contracts with exposure to residual market risks. It is therefore expected to contribute also to the policy objective of supporting market integration of renewable energy projects.

The operation is expected to yield good quality and results, thanks to avoided GHG emissions, fair employment creation and governance arrangements.

EIB's contribution to the project stems from the combination of a financial advantage, flexible terms of the loan, and helping to crowd-in other financiers, thereby facilitating its full financing and implementation.

Offshore wind farms fall under Annex II of the Environmental Impact Assessment Directive (EIA) directive 2011/92/EU, as amended by Directive 2014/52/EU, requiring the competent authorities to determine whether an EIA is required. Due to size, it is expected that all allocations are screened in and are required to perform an EIA. The requirements of the EIA 2011/92/EU as amended by Directive 2014/52/EU, Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC will be verified during the appraisal of the allocations.

Given that the concession for the offshore wind farms in the pipeline of the promoter are awarded following a due public procurement process in line with Directives 2014/23/EU and 2014/25/EU, the promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. However, if at the project appraisal, the EIB were to conclude that the promoter is subject to the EU public procurement legislation then the European Commission will be duly informed, requiring the promoter to apply the relevantEU rules.