The European Investment Bank (EIB) has signed a €100m guarantee agreement to provide Landesbank Saar (SaarLB) with further scope to invest in renewable energy.

Under the terms of the agreement, the EIB will cover up to 50% of the risk on up to 10 existing SaarLB loans for wind and solar projects in France.

The partial offloading of the risk will enable SaarLB to make available nearly €200m worth of additional loans for renewable energy projects, which do not fall under the guarantee deal.

The EIB said it is able to take part of the risk because it is itself partially covered by guarantees of the European Fund for Strategic Investments (EFSI).

It is the first time that EFSI guarantees have been used for this type of risk sharing, EIB added.

EIB vice-president with responsibility for operations in France and Germany Ambroise Fayolle said: “We have for many years been working very closely and constructively with SaarLB to put together loans in the renewable energies field.

“Climate action and ensuring a sustainable and competitive energy supply are top priorities of the EU bank’s activity.

“The European Fund for Strategic Investments and the use of innovative new risk-sharing instruments like today’s increase the capacity of, and incentives for, banks to make additional loans in favour of targeted projects, here in the renewable energies sector.”

SaarLB director Frank Eloy said: “We have long been financing renewable energy projects in German and France as they contribute to structural change and preparation for the future in both countries.

“And at the same time they form an important part of our SME-focused business model. We are therefore delighted that the EIB guarantee is increasing our scope for additional lending and that we are building on our excellent long-term cooperation with the EIB.”

Image: Officials of European Investment Bank and SaarLB sign a memorandum of Understanding for risk mitigation. Photo: Courtesy of European Investment Bank.