European Energy has established a new financial facility to accelerate deployment of new solar and wind energy projects across 10 Northern European countries.
The €150m Green Portfolio-Financing Facility has been secured in collaboration with the two Scandinavian banks SEB and DNB the developer said.
It added that the move represents a paradigm shift for European Energy within construction financing, enabling the financing to a group of unnamed projects, as opposed to the usual project-by-project process.
Unlike traditional facilities that cover one project at a time, this funding can be applied to several projects simultaneously, even if they haven’t been specifically named yet.
This makes it easier and faster to get these projects started, European Energy said.
The money is not just a one-off – as loans for individual projects are paid back, that money can be used again for new projects.
This keeps the funding cycle going without the need for additional financing, the developer said.
Project funding is subject to a bespoke and efficient disbursement process based on pre-established criteria.
This streamlines the process, so projects can start sooner. The criteria include pre-agreed debt-sizing and a format of due diligence.
Furthermore, the financial arrangement includes a structure that spreads out the credit risk across different projects, which is more appealing for the lenders involved, European Energy said.
Flemming Jacobsen, vice president and head of group treasury and financial planning at European Energy said: “We are thrilled to partner with SEB and DNB to launch this innovative facility.
“This marks a significant step forward in optimizing the financing process for our renewable energy initiatives in Northern Europe, ensuring that crucial projects can swiftly move from conception to execution.”
The initial tenure of this facility spans five years, with the potential for two 1-year extensions, potentially reaching a 7-year tenure.
Additionally, an accordion increase mechanism is included, offering the possibility to elevate the facility amount up to €250m, with the participation of both existing and new lenders.
The first allocations from this facility are expected to commence at the start of 2024, heralding a new chapter in green construction financing and reaffirming European Energy’s dedication to a greener, more sustainable future.
The facility is further entered into in accordance with European Energy’s Green Finance Framework.