European Energy Efficiency Fund Launched to Boost Renewable Energy and Efficiency

Strategic Insights -

The European Energy Efficiency Fund (EEEF) was launched on July 1 to provide market-based financing for commercially viable projects that can contribute to energy efficiency and renewable energy in the European Union's public sector. The fund is backed by the European Commission, the European Investment Bank (EIB), Cassa Depositi e Prestiti (CDP), and Deutsche Bank. The EEEF is part of a new sustainable energy facility approved in December 2010, utilizing unspent funds from the European Energy Programme for Recovery (EEPR) from 2009. The fund aims to help EU member states achieve their 2020 targets of reducing greenhouse gas emissions, increasing renewable energy, and improving energy efficiency.

Key Takeaways:

  • The EEEF will provide market-based financing for commercially viable projects in the European public sector, targeting areas such as offshore wind farms, energy infrastructures, and carbon capture and storage.
  • The fund will operate in two ways: investing directly in projects or acting through financial institutions.
  • The EIB will invest €75 million in the mezzanine tranche and senior shares, while the CDP will contribute €60 million to the mezzanine tranche and senior shares. Deutsche Bank will contribute €5 million to the mezzanine tranche and act as investment manager.
  • The European Commission will invest €125 million in the fund's junior tranche and partly assume the economic risks associated with beneficiary projects.
  • The EEEF aims to raise its total volume from €265 million to €800 million by attracting new investors.
  • A technical assistance facility is planned to support investments pursued under the EEEF.
  • The fund will target the large potential for energy efficiency and renewable energy in the European public sector.

Statistics:

  • The EEEF will receive a total commitment of approximately €547 million from its initial backers and aims to raise its total volume to €800 million.
  • The EEEF will target the following areas: offshore wind farms, energy infrastructures, and carbon capture and storage.
  • The European Commission will invest €125 million in the fund's junior tranche, accounting for approximately 3.7% of the EEPR allocation.
  • The EIB will invest €75 million in the mezzanine tranche and senior shares, representing a significant contribution to the fund.
  • The EEEF aims to contribute to the EU's 2020 targets for reducing greenhouse gas emissions, increasing renewable energy, and improving energy efficiency.

Sources:

  • European Commission, European Energy Programme for Recovery (EEPR)
  • European Investment Bank, EEPR and EEEF
  • Deutsche Bank, investment manager for the EEEF
  • ec.europa.eu/energy/eepr/eeef/eeef_en.htm