The European Investment Bank (EIB) will support the addition of 430MW of solar PV and wind in Spain and Portugal through a €100 million (US$114 million) financing deal.
Under what it describes as an “innovative alliance”, the bank will act as the lead lender to a fund managed by alternative investment manager Ben Oldman. This will then lend the funds as bridging loans to final beneficiaries as senior debt, normally via special purpose vehicles set up to carry out the projects.
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The EIB, which is the European Union’s lending arm, said bridging loans cover a financing gap faced by medium-sized promoters, giving them access to the funds they need to move from the ready-to-build stage to the operational phase, accelerating project implementation.
These projects will not need power purchase agreements to receive unitranche loans, which combine two tranches of financing (senior and junior) in a single loan.
The loans will be financed in equal parts by junior bonds subscribed by investors (up to €100 million) and by the senior loan provided by the EIB (up to €100 million).
The commitment follows the EIB providing oil and gas company Galp with loans last year to support the construction of around 2.1GWp of solar PV projects in Spain and Portugal.
Last October, during a meeting to discuss soaring energy prices, the European Council called on the EIB to investigate how to speed up investments in the energy transition to reduce the risk of future energy price crises.