The European Investment Bank will be initiating a €5 billion program to support wind energy producers across Europe. In this sense, Deutsche Bank, headquartered in Germany, will be provided a counter-guarantee of €500 million. This agreement will allow Deutsche Bank to establish a banking guarantee portfolio of up to €1 billion for investments in new wind farms within the European Union. This forms part of the EIB’s €5 billion plan, announced in December 2023, aimed at bolstering commercial bank guarantees within the European wind energy sector.[i]
The EU Wind Energy Package, introduced by the European Commission in October 2023, aims to maintain a renewable and competitive wind energy supply chain across Europe, which plans explicitly to provide guarantees to significant lenders in the sector, such as Deutsche Bank.[ii]
EIB Vice-President Nicola Beer, highlighting the crucial role of rapidly expanding wind energy for the decarbonization of the economy, stated:[iii]
“In collaboration with Deutsche Bank, we are fostering the expansion of renewable energy in Europe, thereby lowering sustainable energy prices. This project will contribute to preserving jobs and creating new ones within a sustainable and competitive European industry.”
The counter-guarantees provided under the EIB’s €5 billion initiative aim to share the credit risks encountered by commercial banks in the wind industry. This allows banks and the sector more accessible access to advance payments and performance guarantees. With this initial project, Deutsche Bank, leveraging EIB’s support, will provide banking guarantees to wind energy producers. As a result, producers will be able to receive advance payments for new wind projects and offer performance guarantees. Hence, this will assist producers in obtaining essential materials for wind farms, such as turbines and grid connections.
The €1 billion guarantee mechanism established through the partnership between the EIB and Deutsche Bank is expected to enable up to €8 billion in private investments. Even though the wind energy sector has succeeded in Europe, it faces challenges such as uncertain demand, slow project permitting processes, supply chain issues, high inflation, and rising international competition. The EIB and Deutsche Bank agreement exemplifies using risk-sharing tools to tackle these challenges and support the financing of green transition projects. The counter-guarantees will release additional funding to address the increasing production demands required to expedite wind energy deployment.
Wind energy is pivotal in helping the European Union meet its renewable energy targets. To achieve a 45% share of renewable energy by 2030, the EU must increase its installed wind capacity by 117 GW. This initiative will enable the development of 32 GW of new capacity. Concerning this, Maroš Šefčovič, Vice-President for Institutional Relations and Foresight at the European Green Deal, stated:[iv]
“A successful clean energy transition requires a robust clean technology manufacturing sector in Europe. This initiative will ensure that the European wind sector has the financial support needed to continue its growth both within the domestic market and globally.”
Hence, Energy Commissioner Kadri Simson has stated:[v]
“Wind energy is critical to achieving Europe’s ambitious renewable energy goals. To make this happen, we must continue supporting our equipment manufacturers. This will help Europe stay competitive and generate green jobs as it moves forward with the green transition. This timely initiative with the European Investment Bank is crucial to unlocking investments and accelerating the wind sector within the EU Wind Energy Package framework.”
The EIB and Deutsche Bank marks a crucial step in partnership supporting and expanding Europe’s wind energy sector. The €5 billion initiative will aid in reaching Europe’s sustainable energy objectives. In contrast, the €500 million counter-guarantee provided to wind energy equipment manufacturers offers a vital mechanism to address financing challenges within the sector. This collaboration presents a significant opportunity for banks to engage with wind energy projects more efficiently and to stimulate increased investment in this area.
Wind energy will enable the European Union to reach its 45% renewable energy target by 2030. The financial support from the EIB and Deutsche Bank will facilitate the expansion of installed capacity necessary to achieve this target. It will provide a vital resource for industry players to realize their projects.
To conclude, this collaboration between the public and private sectors will help accelerate Europe’s digital and sustainable transformation. The EIB and Deutsche Bank support for wind energy producers will drive Europe’s green transition, foster economic growth, create new job opportunities, and enhance the sector’s competitiveness. This initiative will not only advance the development of the wind energy sector but also bolster Europe’s energy independence and represent a significant stride in addressing climate change. Ultimately, the EIB-Deutsche Bank partnership provides a valuable opportunity to advance sustainable and innovative solutions in wind energy.
[i] “Germany: EIB and Deutsche Bank to boost Europe’s wind energy manufacturers”, European Investment Bank, https://www.eib.org/en/press/all/2024-308-eib-and-deutsche-bank-to-boost-europe-s-wind-manufacturers, (Date of Accession: 02.08.2024).
[ii] “EIB commits €5 billion to support Europe’s wind manufacturers and approves over €20 billion in financing for new projects”, European Investment Bank, https://www.eib.org/en/press/all/2023-510-eib-commits-eur5-billion-to-support-europe-s-wind-manufacturers-and-approves-over-eur20-billion-in-financing-for-new-projects, (Date of Accession: 02.08.2024).
[iii] “Germany: EIB and Deutsche Bank to boost Europe’s wind energy manufacturers”, European Investment Bank, https://www.eib.org/en/press/all/2024-308-eib-and-deutsche-bank-to-boost-europe-s-wind-manufacturers, (Date of Accession: 02.08.2024).
[iv] Ibid.
[v] Ibid.
