The European Investment Bank and German lender Commerzbank have signed an agreement to mobilise €2bn for investment into electricity grids. The agreement is aimed at addressing grid-related investment barriers in Europe’s energy transition.
As part of the deal, EIB will extend a €250m guarantee to Commerzbank. The portfolio guarantee will cover up to 50% of performance risk and offer equipment manufacturers advance payment guarantees.
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The EIB expects this financing to mobilise investment across the grid value chain in the EU.
“Our cooperation with Commerzbank will support investments of up to €2 billion in new lines, transformers and smart infrastructure, make the energy supply more resilient, and help reduce energy costs for people and businesses in the long term”, said EIB vice president Nicola Beer.
“Without efficient grids, wind turbines, solar panels and heat pumps go unused – we would miss the energy transition, literally sitting in gridlock”, she warned.
In a statement EIB cited an expected rise in grid expansion investments by 2030, much of it coming from grid operators.
Neil Aiken, divisional board member lending at Commerzbank says the agreement enables the bank to address financing demand for grid infrastructure. “As a leading bank for German SMEs and a key energy industry partner, we see every day how large the investment and financing needs for grid infrastructure are”, Aiken notes.
This marks EIB’s inaugural transaction under its pan-European Grid Package. The initiative builds on an existing risk-sharing approach the bank has taken for the wind energy industry. Here too, Commerzbank has partnered with the EIB.
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