Italy's Sanpaolo, EIB Ink Deal Expected to Unlock $8.7B in Wind Investments
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Loading... - Alira Evans
- 15 Oct 2024
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The European Investment Bank (EIB) has committed a counter-guarantee of EUR 500 million ($546.7 million) for a financing package of up to EUR 1 billion ($1.1 billion) that will be offered by Italian bank Intesa Sanpaolo SPA to wind projects across the European Union. This deal is expected to stimulate an estimated EUR 8 billion ($8.7 billion) in total investments to support the supply chain and power grid interconnection for new wind farms projects across the European Union.
According to EIB vice president Gelsomina Vigliotti, "Wind energy is central to European energy independence." The agreement aims to overcome challenges faced by wind energy producers, such as high costs, uncertain demand, slow permitting, supply chain bottlenecks, and strong international competition. This deal demonstrates how the EIB's risk-sharing instruments can help finance key projects for the green transition and the decarbonization of the European economy, while enhancing industrial competitiveness.
The agreement counts toward the deployment of EUR 5 billion ($5.5 billion) in guarantees pledged by the EIB at COP28 last year to spur wind components manufacturing in the EU. The EIB expects this commitment to unlock EUR 80 billion ($87.5 billion) in wind energy investments and result in 32 gigawatts of additional installed wind generation capacity.
The EUR 5 billion is part of the EIB's contribution to the European Wind Power Package, which lays out strategies from policy reform to investment promotion and skills development for the wind sector to help achieve the EU's legislated target of raising the share of renewables in the bloc's energy mix to 42.5 percent by 2030.
This deal marks the first time that the EU-funded bank is tapping into InvestEU, the bloc's umbrella investment program, for a deployment of the EUR 5 billion package. InvestEU is a budget guarantee of EUR 26.2 billion ($28.6 billion) to support economic recovery from the coronavirus pandemic and drive climate projects. At least 30 percent of InvestEU is allotted for EU climate action.
The agreement with Sanpaolo is the second rollout of the EUR 5 billion package, following the EIB's counter-guarantee of EUR 500 million for Deutsche Bank AG. The Frankfurt, Germany-based bank has allocated EUR 1 billion in guarantees for new investments in wind farms across the EU.
