European Energy has unveiled a groundbreaking financial initiative, the €150 million Green Portfolio-Financing Facility, in partnership with Scandinavian banks SEB and DNB. This innovative funding model represents a departure from the conventional project-by-project approach, allowing simultaneous financing for a group of undisclosed solar and wind projects across 10 Northern European countries.
Unlike traditional facilities tied to specific projects, this financing mechanism streamlines the process, facilitating quicker project commencement. The €150 million fund operates cyclically, with repayments from individual projects reinvested in new initiatives, eliminating the need for additional financing.
The financial arrangement introduces an efficient disbursement process based on pre-established criteria, including pre-agreed debt-sizing and a standardized due diligence format. The structure also disperses credit risk across diverse projects, enhancing its appeal to lenders.
Flemming Jacobsen, Vice President and Head of Group Treasury and Financial Planning at European Energy, expressed enthusiasm about the collaboration with SEB and DNB, emphasizing that this innovative facility marks a significant advancement in optimizing the financing process for renewable energy projects in Northern Europe.
The initial tenure of the facility spans five years, with the potential for two one-year extensions, potentially reaching a seven-year tenure. The agreement includes an accordion increase mechanism, offering the flexibility to raise the facility amount to €250 million, with participation from existing and new lenders.
Aligned with European Energy's Green Finance Framework, the facility underscores the company's commitment to a sustainable future. The first fund allocations are anticipated to commence in early 2024, heralding a new era in green construction financing and reinforcing European Energy's dedication to accelerating the deployment of solar and wind projects in the region.
