ANNOUNCEMENT 28 Dec 2017

In December 2017, the European Investment Bank (EIB) signed a loan agreement with Windkraft Simonsfeld AG to support its construction and operation of three wind parks in Austria. 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, SIMONSFELD ONSHORE WIND: http://www.eib.org/en/projects/loan/loan/20170323
The European Investment Bank, Project summary, Project No. 20170323, SIMONSFELD ONSHORE WIND: http://www.eib.org/en/projects/pipelines/pipeline/20170323
The European Investment Bank, press release of 24 January 2018, Investment Plan for Europe: EIB finances Austrian wind farms: http://www.eib.org/en/infocentre/press/releases/all/2018/2018-016-investment-plan-for-europe-eib-finances-austrian-wind-farms
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: 28 Dec 2017 | Removal date: open ended

State loan

The loan agreement between the European Investment Bank (EIB) and Windkraft Simonsfeld AG was signed on 28 December 2017 and has a total value of EUR 48 million (approx. USD 57.4 million). The loan supports the company's construction and operation of three wind parks in Austria with a total capacity of 39MW.

Windkraft Simonsfeld AG is one of the largest power producers in Austria operating 84 wind power plants in Austria and two in Bulgaria. The company has its headquarters in Austria.

In this context, the CEO of Windkraft Simonsfeld AG Martin Steininger stated: "2018 will be a year of strong growth for us. We are installing 13 additional wind power plants with a nominal output of 39 MW, increasing our production capacity by 22%" ... "The volume of electricity produced by these new wind power plants corresponds to the consumption of more than 25 000 households – an important step in the fight against climate change."

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: 28 Dec 2017 | Removal date: open ended

Loan guarantee

The EIB's loan to Windkraft Simonsfeld AG signed on 28 December 2017 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total value of EUR 48 million (approx. USD 57.4 million) and will support the company's construction and operation of three wind parks in Austria with a total capacity of 39MW.

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".