The European Investment Bank has agreed to provide a guarantee of up to €250 million to Denmark-based Danske Bank to support wind energy projects across Europe.
The guarantee will allow Danske Bank to offer up to €500 million in guarantees for the wind sector, covering the production and delivery of equipment needed for new wind farms, the EIB announced on Thursday.
Bank guarantees are commonly required in large wind projects, as manufacturers often need to provide assurances to buyers before production starts or turbines and other components are delivered, the EIB said.
The arrangement involves risk sharing between the EIB and Danske Bank, increasing the lender’s capacity to provide these guarantees.
EIB Vice-President Ioannis Tsakiris said the agreement would help wind manufacturers secure financing to “grow, innovate and deliver new projects.”
First Nordic deal under EU wind package
The EIB said the deal is the first agreement of its kind with a financial intermediary in the Nordic region under the EU’s 2023 Wind Power Package, an initiative designed to speed up the expansion of wind energy and support European manufacturers.
Wind energy provides about a fifth of electricity generation on average in the European Union, while Denmark has the highest share at around 60%.
EU companies account for around 20% of the global wind market.
Samu Slotte, Danske Bank’s head of sustainable finance, said guarantees can help manufacturers take on new orders and deliver equipment for wind projects.
The EIB pointed out that the operation is backed by the EU’s InvestEU programme and contributes to the 2022 REPowerEU initiative, which focuses on reducing dependence on imported fossil fuels and increasing renewable energy use.
Europe needs to add 117 gigawatts of wind power capacity to meet the EU target of 45% renewable energy by 2030.
