The European Investment Bank (EIB) is launching a €5 billion initiative to support manufacturers of wind-energy equipment in Europe by providing a €500 million counter-guarantee to Germany-based Deutsche Bank.
This transaction will enable Deutsche Bank to set up a portfolio of up to €1 billion in banking guarantees for new investments in wind farms in the European Union.
The deal marks the first operation under the December 2023 EIB plan to provide €5 billion to strengthen the provision of commercial bank guarantees for companies throughout the European wind industry. This initiative is part of an EU Wind Power Package presented by the European Commission in October 2023, aimed at maintaining a healthy and competitive wind energy supply chain across the Union. It includes counter-guarantees to the sector’s main lenders, including Deutsche Bank.
The EIB’s counter-guarantees under its €5 billion initiative are designed to share credit risks faced by commercial banks when dealing with players in the wind industry. This instrument facilitates access to advance payment and performance guarantee lines, benefiting both the banks and the industry.
In this initial project, Deutsche Bank will use the EIB's backing to provide banking guarantees to wind-energy manufacturers. This will enable the manufacturers to receive advance payments and provide performance guarantees when taking on new wind projects. The guarantee scheme also enables manufacturers to pay their suppliers in advance for the supply of wind farms and the related wind value chain components, including turbines, grid connection infrastructure, cables, and transformer stations. The EIB-Deutsche Bank €1 billion guarantee facility is estimated to initiate private investments of up to €8 billion.
