EIB finances grid upgrades across Germany
Image courtesy TEAG
On the back of approving €805 million in clean energy financing, the European Investment Bank (EIB) is lending €400 million ($425.2 million) to municipal energy supplier Thüringer Energie AG (TEAG) to upgrade and digitise the electricity grid in Thuringia, Germany.
A day after approving a wide-reaching financing package, including financing for upgrading the German distribution grid, the EIB announced a loan for power grid upgrades in the German federal state of Thuringia, a co-financed project totalling €600 million ($637.7 million).
The project will upgrade and expand the grid in rural areas to meet the needs of the energy transition.
New power cables and overhead lines of all voltages will be installed and others will be replaced. Substations will also need to be built and modern network components will be required for automated and digital dispatching.
The investments will be used to upgrade the grid to connect more decentralised producers and users of solar and wind power, among them consumers who want to connect solar panels, heat pumps and wall boxes to benefit from the digital transformation.
The overarching goal is to ensure a reliable and safe power supply in Thuringia as demand for electricity grows.
TEAG is the leading energy service provider in the German federal state of Thuringia, supplying the region with electricity, natural gas and heating, as well as providing telecommunication services and public charging infrastructure for e-mobility.
Around 620 municipalities and towns in Thuringia hold the majority share (84.8%) of the company, which was brought back into public ownership in 2013 after previously belonging to energy supplier E.ON.
EIB vice-president Nicola Beer, who oversees EIB financing in Germany, said in a release: “Modern power grids are vital for ensuring a future-proof and sustainable energy supply for people and businesses in Thuringia.
“The grid needs to be readied to handle the feed-in of larger volumes of electricity from wind and solar power. The development of the grid also in rural areas will help to reduce greenhouse gas emissions and improve energy security for the people of Thuringia.”
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Clean energy financing
A day before the TEAG announcement, the EIB Board approved €805 million ($857.4 million) in clean energy financing, including investment to upgrade electricity distribution in Germany.
The financing forms part of a larger, €4.3 billion ($4.6 billion) package of financing for regional transport and energy distribution, business investment in innovation and climate action, energy storage and improved water and waste treatment.
The energy segment investment will go into upgrading the German power distribution systems to enable the integration of additional renewable capacity, cater for increased energy demand for charging EVs and from industry and shield power infrastructure from extreme weather risk.
The Board also agreed backing for investment to expand grid energy pumped storage in the Baltics to enable increased use of intermittent wind and solar power and to enhance security of energy supply by reducing dependency on imports.
New streamlined financing to support small and medium scale renewable energy investment in Italy, in cooperation with a local financing partner, was also approved.
“Access to finance is crucial for business growth, job creation and better services,” said EIB president Nadia Calviño in a release.
“The investment projects approved today will help European companies innovate, expand renewable energy use and improve public transport and local recycling, boosting the competitiveness of our economies.”
Under the full EIB package, new projects are being backed across Austria, the Czech Republic, France, Germany, Hungary, Italy, Lithuania and Slovakia.
The EIB Board agreed to finance sustainable transport in France, including the deployment of electric buses and electric bikes, renovation and upgrading of train, tram and metro rolling stock, and accessibility improvements. The EIB will also purchase green bonds issued by the regional transport operator to finance the operation.
Financing was also approved for circular economy investment by a regional regulated utility body in Italy to upgrade drinking water distribution and protect water supply from extreme weather and to increase waste recycling capacity.
€3 billion ($3.2 billion) of financing will back business investment that will strengthen corporate research innovation, tackle financing gaps holding back the growth of midcap companies, support the expansion of activities in cohesion regions and boost private sector’s climate action.
EIB supports climate action investment by businesses in five central European countries, to help engineering, construction and manufacturing companies reduce energy use and costs, was also agreed.
