Denmark-based European Energy has partnered with two Scandinavian banks SEB and DNB to secure a €150M Green Portfolio Financing Facility.
This five-year funding initiative aims to expedite the implementation of renewable energy projects, focusing on solar and wind energy across 10 Northern European countries.
The Green Portfolio-Financing Facility, initially spanning five years with potential extensions, may reach a 7-year tenure. It includes an accordion increase option, allowing the facility amount to rise to €250M with participation from existing and new lenders.
Allocations from this facility are set to begin in early 2024, marking a significant moment in green construction financing. This move reaffirms European Energy’s dedication to a sustainable future and is in alignment with the company’s Green Finance Framework.
Kristi Birkeland Sorensen, Global Head at DNB Renewables & Clean Tech says, “We are delighted to have supported one of our key clients in the renewables sector with this highly bespoke financing solution.”
“This deal highlights a growing focus amongst renewable energy companies to optimise its construction financing process, including the cost of capital, operational burden and transaction costs.”
“As a pioneer in many areas of its business, it is not surprising that European Energy is one of the first renewable companies to make this leapfrog on project financing, too,” adds Sorensen.
European Energy’s funding strategy
The Green Portfolio-Financing Facility signifies a paradigm shift for European Energy in construction financing. Departing from the conventional project-by-project approach, it allows funding for a collective of undisclosed projects.
The Facility offers features such as Portfolio Financing for simultaneous funding of multiple projects; the Revolving Facility, which ensures a continuous funding cycle by redeploying repaid funds for new projects; and Criteria-Based Funding, which streamlines the disbursement process.
The financial arrangement’s efficiency and security are highlighted through the dispersion of credit risk across various projects, making it appealing to lenders.
Flemming Jacobsen, VP and Head of Group Treasury and Financial Planning at European Energy says, “We are thrilled to partner with SEB and DNB to launch this innovative facility. This marks a significant step forward in optimising the financing process for our renewable energy initiatives in Northern Europe, ensuring that crucial projects can swiftly move from conception to execution.”
Brief about European Energy
Founded in 2004 by Knud Erik Andersen and Mikael D. Pedersen, European Energy is a Danish company that originated with its initial onshore wind projects in Germany. It is addressing climate change by developing, constructing, and operating wind and solar farms globally.
These projects not only supply green power to consumers and businesses but also generate stable revenue for the institutional investors partnering with European Energy.
The company says, “European Energy´s mission is to grow into a global force that champions the green transition, develop green energy solutions and encourage the world to join the movement towards a fossil-free society.”
As of 2023, European Energy is screening for projects in over 29 countries, engaging in development activities in 19 of them.