Two Scandinavian banks SEB and DNB have pooled in €150 million to help Danish renewable energy developer European Energy to accelerate its deployment of new wind and solar energy projects.
Lent under the new financial instrument called the Green Portfolio Financing Facility, it will support the company's construction activities across 10 Northern European countries.
This kind of financing is applicable to several projects simultaneously unlike the traditional facilities that cover one project at a time.
"This deal highlights a growing focus amongst renewable energy companies to optimize its construction financing process, including cost of capital, operational burden and transaction costs," said Global Head of DNB Renewables & Clean Tech Kristi Birkeland Sorensen.
The initial tenure of this facility, in accordance with European Energy's Green Finance Framework, is for 5 years. Initial allocations from the facility will commence at the start of 2024. The tenure has the potential for another two 1-year extensions, potentially reaching a 7-year tenure.
It is a revolving facility which means as loans for individual projects are paid back, the same money can be reused for new projects, hence the funding cycle continues, without the need for additional financing.
European Energy's VP and Head of Group Treasury and Financial Planning Flemming Jacobsen said this financial process will enable it to move forward swiftly from conception to execution.
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