ANNOUNCEMENT 25 Jul 2018
In July 2018, the European Investment Bank (EIB) signed a loan agreement with Greenalia SA to finance the company's renewable power generation plant project. The loan is guaranteed by the European Fund for Strategic Investment (EFSI).
NUMBER OF INTERVENTIONS
The European Investment Bank, Financed Projects, CURTIS BIOMASS POWER GENERATION PLANT: http://www.eib.org/en/projects/loan/loan/20170647
The European Investment Bank, Project summary, Project No. 20170647, CURTIS BIOMASS POWER GENERATION PLANT: http://www.eib.org/en/projects/pipelines/pipeline/20170647
The European Investment Bank, press release of 26 July 2018, Investment Plan for Europe: EIB provides EUR 50 million loan to finance biomass plant in Galicia developed by Greenalia Group: http://www.eib.org/en/infocentre/press/releases/all/2018/2018-204-investment-plan-for-europe-eib-provides-eur-50-million-loan-to-finance-biomass-plant-in-galicia-developed-by-greenalia-group.htm
EFSI Operation Scoreboard of 12 April 2018: http://www.eib.org/attachments/scoreboards/83433467.pdf
Greenalia SA, About us: http://www.greenalia.es/our-group/about-us/
European Commission (13 January 2015): The Investment Plan for Europe: Questions and Answers: http://europa.eu/rapid/press-release_MEMO-15-3223_en.htm
EIB: European Fund for Strategic Investments - Questions and Answers. Available at: http://www.eib.org/attachments/press/investment_plan_for_europe_qa_en.pdf
The loan agreement between the European Investment Bank (EIB) and Greenalia SA was signed on 25 July 2018 and has a total approved value of EUR 60 million (approx. USD 70 million). More specifically, a EUR 50 million loan was signed on the same day, whilst the remaining EUR 10 million was signed on 26 October 2018.
Greenalia SA is a private power producer exclusively utilising renewable energy sources. The company has its headquarters in Spain. The loan will support Greenalia's project to construct, maintain and operate a 50 MWe electricity-only biomass plant in Spain. The plant will use forest biomass to produce energy which will be fed into the public grid.
In this context, the EIB stated in a press release that: "In addition to the positive environmental impact, this EIB-funded project will generate economic and social benefits, promoting job creation and economic growth in rural areas."
A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the investment support granted here is discriminatory.
The EIB's loan agreement with Greenalia SA signed on 25 July 2018 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total approved value of EUR 60 million (approx. USD 70 million) and will support the company's project to construct, maintain and operate a 50 MWe electricity-only biomass plant in Spain.
The EFSI is a joint initiative by the EIB and the European Commission to promote investment in Europe. The EIB has designated EUR 7.5 billion of its capital for lending to European projects with a higher risk profile than usually taken on by the bank. To compensate for the increased lending risk, the European Commission has agreed to fully guarantee all lending under the EFSI up to a budget of EUR 26 billion. The loan described was issued under the EFSI and thus benefits from a full guarantee through the EU budget.
EFSI support does not fall under EU State Aid rules as it is meant as a tool to address "market failures or sub-optimal investment situations". However, the investment support does include favourable conditions in the form of public assumption of risk.
As described in the European Commission's Fact Sheet from 13 January 2015: "The type of risk-financing instruments will be designed so as to take uncertainty out ("first loss protection") of as such viable projects and therefore crowd-in private sector investments. Since the EFSI will take riskier tranches in investment projects, the private sector will be able to join under more favourable conditions." Furthermore, the EIB states that "The new initiative [i.e. the EFSI] will benefit from the EIB’s strong credit standing that enables funding at favourable conditions and across maturities".