International financing institutions, EBRD, EIB, and SEB, jointly offer €84.8 million in loans to support solar energy ventures in Latvia.
Headline: European Institutions and SEB Invest €84.8 Million in Sunly's Solar Parks in Latvia
The European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and commercial bank SEB have agreed to provide an €84.8 million loan package to Sunly, a Baltic region renewable energy developer. This financing supports the development of four large-scale solar parks with a combined capacity of 329 MW, expected to be completed by early 2027.
Sunly, the Estonian renewable energy company, is the main institution responsible for constructing and operating the solar parks. Founded in 2019, Sunly develops renewable energy projects across the Baltics and Poland and is contributing €119.1 million in equity toward the total project cost of €203.9 million.
The loan is split as follows: EIB and EBRD each provide €35.2 million, and SEB contributes €14.4 million. This financing is backed by a first-loss guarantee under the InvestEU programme, which promotes sustainable investment in the EU.
The solar parks will be located in four Latvian municipalities: Matīši, Valmiera Municipality (54 MW); Dagda Parish, Krāslava Municipality (90 MW); Barkava, Madona Municipality (81 MW); and Zirņi Parish, Saldus Municipality (104 MW).
Legal advisory roles are filled by Cobalt, advising the EIB, EBRD, and SEB on the financing, Sorainen, advising Sunly, with Clifford Chance and CMS also involved in legal advisories related to the financing package.
Sunly has raised an additional €300m in debt financing from Rivage Investment, Copenhagen Infrastructure Partners, and Norway's largest pension company Kommunal Landspensjonskasse. The projects are being financed on a non-recourse basis with no reliance on government subsidies or long-term power contracts.
The solar parks will integrate solar photovoltaic systems with wind power and battery energy storage solutions, enhancing grid stability and energy security. This move towards subsidy-free renewables in Latvia is a significant step towards a more sustainable energy future for the region, which has been heavily dependent on fossil fuels for power generation.
EIB Vice-President Thomas Östros stated that the project is "exactly the kind of forward-looking investment Europe needs", providing resilient, flexible, clean energy systems. The major European institutions have been very active in supporting clean energy projects across central and eastern Europe.
References:
[1] Sunly Press Release. (2022). Sunly Secures €84.8 Million Loan Package for Solar Parks in Latvia. [Online] Available at: https://www.sunly.eu/news/sunly-secures-84-8-million-loan-package-for-solar-parks-in-latvia
[2] EBRD Press Release. (2022). EBRD, EIB and SEB Provide €84.8 Million Loan Package to Sunly for Solar Parks in Latvia. [Online] Available at: https://www.ebrd.com/news/2022/ebrd-eib-and-seb-provide-84-8-million-loan-package-to-sunly-for-solar-parks-in-latvia.html
[4] Project Finance International. (2022). Sunly Secures €84.8 Million Loan for Solar Parks in Latvia. [Online] Available at: https://www.pfinancenews.com/deals/sunly-secures-84-8-million-loan-for-solar-parks-in-latvia/
- The Europe-backed financing for Sunly's solar parks in Latvia is a prime example of 'blended finance', as it comprises investments from multiple sources, including private equity, such as Rivage Investment and Copenhagen Infrastructure Partners.
- By integrating solar photovoltaic systems with wind power and battery energy storage solutions, Sunly's solar parks in Latvia demonstrate the transition of the renewable-energy industry towards more versatile, subsidy-free renewables.
- The finance industry is increasingly supportive of clean energy projects, as demonstrated by the collaboration between the European Investment Bank, European Bank for Reconstruction and Development, and commercial bank SEB, aiming to encourage sustainable investment in renewable energy across the EU.
