Sustainable energy is already benefitting from the European Fund for Strategic Investments (EFSI, also known as the Juncker Plan). Priority sectors for funding under the plan are strategic infrastructure including digital, transport and energy in particular energy interconnections and urban development, education, research and innovation, environmentally sustainable projects, the expansion of renewable energy and resource efficiency and smaller businesses.
Overall, the initiative is expected to mobilise EUR 315 billion of new investment, mostly from the private sector, over three years.
So far, energy efficiency and renewable energy are strong components of projects funded.
In June 2015, a EUR 275 million loan was signed, including EUR 75 million earmarked to benefit from the EFSI guarantee, for construction of a new EUR 1.2 billion new energy efficient pulp mill at Äänekoski in Finland. This represents one of first examples of European Investment Bank (EIB) financing earmarked for support under the EFSI guarantee. Also identified for support is an energy efficiency investment to reduce heating bills of private homes in France – this project will enable renovation work to cut energy bills in more than 40,000 homes.
Thousands of renewable energy jobs in Denmark
At the beginning of July, it was announced that the EIB is providing equity-type financing of up to EUR 75 million (some DKK 560m) to Copenhagen Infrastructure Partners for an innovative infrastructure fund (Copenhagen Infrastructure II) investing in large energy-related projects such as offshore wind, biomass and transmission schemes. The EIB financing will be proposed for backing by the EU budget guarantee under the EFSI.
The renewable energy infrastructure fund Copenhagen Infrastructure II targets mezzanine and equity-type investments primarily in newly established greenfield energy-related projects, located mainly in northern and western Europe. This groundbreaking operation will enable institutional investors to engage at an earlier stage in large renewable energy infrastructure projects. The fund also stands out in terms of its innovative structure, accommodating a long-term investment horizon of twenty years.
The fund will primarily focus on renewable energy projects that generate energy with typically lower pollutant and climate-relevant emissions than conventional fossil fuel-based power plants. The anticipated high share of offshore wind, biomass and transmission investments is expected to generate considerable employment in the construction phase (around 2500 - 4000 jobs). It is also estimated that some 1000 jobs may be created during the project’s operation, a significant number of which will be highly-skilled jobs.
Jonathan Taylor, EIB Vice-President responsible for lending in Denmark, stated:
“We are proud to support this innovative fund, as it will contribute to the achievement of European targets for renewable energy generation and CO2 emissions reduction, safeguarding and creating at the same time a significant number of jobs. This first transaction in Denmark under the Investment Plan for Europe shows that the EIB is honouring its commitment to roll out the initiative even before the EFSI is officially launched.”
High tech jobs for Andalusia
Spanish company Abengoa will benefit from a EUR 125 million loan to support its research, development and innovation activities.
Of the EUR 125 million loan provided to Abengoa by the EIB, EUR 50 million will be submitted for backing by the EU budget guarantee under the EFSI. The rest of the loan (up to EUR 75 million) is supported by InnovFin – EU Finance for Innovators, a new range of EIB Group products which benefit from the financial backing of the European Union under Horizon 2020 Financial Instruments and are designed to facilitate access to finance for innovative businesses.
This long-term EIB loan will support the company's research in the areas of biotechnology and the development of chemical processes for refineries, water treatment, advanced electrical systems and renewable energies. The energy component accounts for EUR 25 million of the EUR 125 million loan from the EIB.
Abengoa's RDI programme is designed to increase the company's competitiveness by innovating clean energy and green technologies that will bring major environmental benefits. It is hoped that the EIB loan will a give a major boost to the company’s sustainable growth - and the creation of highly-skilled jobs at Abengoa's research centres in Andalusia, a region with high unemployment.
Renewable energy investment fund in France
On 23 July, the EIB signed its first equity participation under the Juncker plan, a EUR 50 million commitment to an investment fund managed by Omnes Capital and entirely dedicated to developing renewable energies: Capenergie 3.
This investment project will serve to finance means of energy production with a global capacity of over 500 MW and create more than 1 000 jobs during the construction and operation of the renewable energy projects supported. The EIB's participation in the form of an equity injection is expected to attract other international investors, helping Capenergie to speed up its fund-raising and grow its business.
With a target size of EUR 200 million, the Capenergie 3 fund will leverage total investment of EUR 1 billion. On the strength of its expertise in the sector, it will focus on European renewable energy production infrastructure projects. These decentralised projects will be developed by key SMEs in the sector (wind, solar, hydropower and heat networks). As a partner to such SMEs for the past ten years, Omnes Capital is a vital player in the renewable energies market.
"With the EIB's support, Capenergie 3 will be able to finance several hundred megawatts of power – meaning job creation in our regions – and foster the global development of partner SMEs in our projects. The market environment is favourable: renewables are now competitive with traditional sources of energy. So this is the right time for institutional investors to invest in this asset class" said Serge Savasta, Managing Director of Omnes Capital.
Other sustainable energy schemes expected to be supported under the new European Fund for Strategic Investments include the large scale roll out of smart meters to better manage energy use in the UK, and lending to facilitate access to finance for small renewable energy projects in Germany and France, as well as upgrading inland waterways in the Netherlands.