ANNOUNCEMENT 19 Jul 2017

In July 2017, the European Investment Bank (EIB) signed a loan agreement with Terna Energy Group to support its development, construction and operation of three wind farms in Greece. The loan will be guaranteed by the European Fund for Strategic Investment (EFSI).

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The European Investment Bank, Financed Projects, VIOTIA WIND PARKS: http://www.eib.org/en/projects/loan/loan/20160077
The European Investment Bank, Project summary, Project No. 20160077, VIOTIA WIND PARKS: http://www.eib.org/en/projects/pipelines/pipeline/20160077
European Investment Bank, press release of 20 July 2017, Juncker Plan financing for windfarms in Greece: EIB signs EUR 24m loan with Terna Energy Group: http://www.eib.org/en/infocentre/press/releases/all/2017/2017-209-juncker-plan-financing-for-windfarms-in-greece-eib-signs-eur-24m-loan-with-terna-energy-group
Terna Energy Group: http://www.terna-energy.com/
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

Inception date: 19 Jul 2017 | Removal date: open ended

State loan

The loan agreement between the European Investment Bank (EIB) and Terna Energy Group was signed on 19 July 2017 and has a total value of EUR 24 million (approx. USD 27.6 million).

The loan will support the company's project to develop, construct and operate three wind farms in Greece. The combined operating capacity of both wind farms is 48.6 MW.

In this context, the European Commission Vice-President, responsible for Jobs, Growth, Investment and Competitiveness, Jyrki Katainen stated: "Today's agreement is another clear demonstration of the Commission's commitment to supporting the mobilisation of investments in Greece that will contribute to securing the country's recovery."

Terna Energy Group carries out renewable energy projects from development and construction to financing and operation. The company has its headquarters in Greece and is present in Central and South-East Europe as well as in the USA.

In July 2018, the EIB signed a similar loan agreement with Terna Energy Group, see related state act.

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.

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 19 Jul 2017 | Removal date: open ended

Loan guarantee

The EIB's loan to Terna Energy Group signed on 19 July 2017 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total value of EUR 24 million (approx. USD 27.6 million) and will support the company's construction and operation of three wind farms in Greece.

Terna Energy Group carries out renewable energy projects from development and construction to financing and operation. The company has its headquarters in Greece and is present in Central and South-East Europe as well as in the USA.

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".