The European Bank for Reconstruction and Development (EBRD) has committed €12.2 million for the development of two solar power plants in Dolj County, Romania.
This funding is part of a limited recourse financing package designed to bolster renewable energy construction in Romania and assist the country in achieving its ambitious renewable energy goals.
The Borrower and Project Details
The loan recipient is Danube Solar Five, a special purpose vehicle established in Romania and owned by Lithuania’s INVL Renewable Energy Fund I.
This fund is managed by UAB INVL Asset Management (INVL), which has over three decades of experience and manages assets exceeding €1 billion, including those in real estate, energy, and infrastructure sectors across the Baltics and Eastern Europe.
The EBRD’s financing covers half of a €24.4 million bond designated for the construction of solar plants in Robanesti and Pielesti, with a combined capacity of 60 MW.
Eiffel Investment Group, a Paris-based energy infrastructure investment fund and EBRD’s partner, will provide the remaining €12.2 million.
Eiffel Investment Group’s Role
Eiffel Investment Group manages €6.4 billion in assets and is backed by the Impala group, founded by entrepreneur Jacques Veyrat.
The group brings significant industrial expertise, particularly in energy transition, life sciences, agri-food, and digital sectors.
Eiffel Investment Group aims to generate strong financial performance while creating positive social and environmental impacts, with a team of about 100 professionals operating in France, BeNeLux, the US, and the UAE.
Romania’s Commitment to Renewable Energy
As an EU member, Romania is dedicated to executing the EU’s Fourth Energy Package, ‘Clean Energy for all Europeans,’ which seeks to modernize the EU electricity market to accommodate a larger share of renewables.
Romania has enhanced its regulatory framework for renewables, beginning with the complete liberalization of the local energy market as of January 1, 2021.
Romania’s renewable energy ambitions align with the EU-wide Fit for 55 and REPowerEU plans to escalate renewable production by 2030.
In 2023, Romania pledged to raise the renewable energy share in its total energy consumption from 24.3% in 2019 to 36.2% by 2030, adding 11.9 GW of new renewable capacity.
Innovative Financing Structures
Historically, investments in the region have predominantly been made by independent power producers who maintain ownership throughout the project lifecycle.
While institutional investors show interest in these assets, they often face limitations in assuming the initial construction and development risks.
Limited recourse construction bridge facilities (CBFs) are innovative financing structures that help developers manage these risks.
Importance of Construction Bridge Facilities
CBFs are crucial for attracting additional capital into the renewable energy sector, which requires substantial investment to meet the region’s green transition goals.
“While CBFs are now common practice in Western Europe, only one construction bridge facility has been financed in Romania to date. The EBRD’s involvement in this segment sets a market precedent for other potential financiers in the country,” stated Grzegorz Zielinski, EBRD Head of Energy Europe.
EBRD’s Long-standing Partnership with Romania
The EBRD has been a key partner for Romania, investing nearly €11 billion in 533 projects to date. This ongoing support highlights the EBRD’s commitment to fostering Romania’s renewable energy sector and overall economic development.