Spain: EIB to provide €100 million to co-finance solar photovoltaic and wind energy projects on the Iberian Peninsula – EQ Mag Pro

• Innovative alliance between the EIB and Ben Oldman to offer a tailored product to speed up the construction of renewable projects and bridge a financing gap

• The project is expected to support the installation of some 430 MW of new renewable energy capacity, equivalent to the annual energy use of more than 200 000 households

• An estimated 720 direct and indirect jobs will be created during the plant construction phase

The European Investment Bank (EIB) has signed an agreement under which it will grant unitranche loans for solar photovoltaic and onshore wind projects in Spain and Portugal from 2021 to 2024. These projects will not need power purchase agreements (PPAs) to receive unitranche loans, which combine two tranches of financing (senior and junior) in a single loan.

The EIB will act as the lead lender to a Ben Oldman-managed investment fund, which will in turn lend the funds as bridging loans to final beneficiaries as senior debt, normally via special purpose vehicles (SPVs) set up to implement the projects. Ben Oldman is an alternative investment manager and will handle the origination of the loans.

The project is expected to generate about 430 MW of new renewable energy, equivalent to the annual energy use of more than 200 000 households. It will therefore contribute to the national renewable energy targets set out in the national energy and climate plans of Spain and Portugal.

In addition, EIB financing for the renewable energy sector will contribute to the security of energy supply, the fight against climate change, job creation and social cohesion. Most of the investment programme will be located in transition and less developed regions covered by the EU cohesion policy (80%), and its full implementation will contribute to creating 720 jobs during the implementation phase, fostering the economic recovery of these regions that were hit hard by the coronavirus pandemic.

Simple and quick to apply, 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 loans will be financed in equal parts (50:50) by junior bonds subscribed by investors (up to €100 million) and by the senior loan provided by the EIB (up to €100 million). Ben Oldman will be the shareholder of the reserved investment fund, and will also subscribe some of the junior bonds. The target for the next three years is to originate €200 million in six to ten unitranche loans to a minimum of three beneficiary promoters.

EIB Vice-President Ricardo Mourinho Félix said: “As the EU climate bank, the EIB is respecting its commitment to the green recovery in Europe by supporting the construction of sustainable infrastructure, while also boosting job creation. The Spanish and Portuguese markets have huge potential for renewable energy, and the EU bank is pleased to lend all our support to the investments needed to meet objectives on renewable energy generation and decarbonization of the economy.”

Ben Oldman founder Isaac Benzaquen added: “Bridge financing in sectors where there is a clear need for transitional capital still ranks among Ben Oldman’s key focus areas. In this particular case, the new joint bridge financing programme with the EIB offers an innovative and necessary solution to promote the development of green energy in Spain and Portugal.”

Background information:

The European Investment Bank (EIB) operates in around 160 countries and is the world’s largest multilateral lender for climate action projects.

The EIB Group recently adopted its Climate Bank Roadmap to deliver on its ambitious agenda to support €1 trillion of climate action and environmental sustainability investments in the decade to 2030 and to allocate more than 50% of its financing to climate action and environmental sustainability by 2025. As part of the Roadmap, all new EIB Group operations have also been aligned with the goals and principles of the Paris Agreement since early 2021.

Ben Oldman was founded in 2013 as an alternative investment manager focused on southern Europe, specializing in corporate direct lending, investment secured by infrastructure and real estate assets, and renewable energy financing. It has invested over €3 billion globally and has offices in Luxembourg, Madrid and Milan.