How the EIB shoulders risk in offshore wind funding

The European Investment Bank invested €10bn to kick-start the offshore wind sector and now hopes to do the same for floating technology

The EIB has approved funding for Engie and EDP’s 30MW Éoliennes Flottantes Golfe du Lion project
The EIB has approved funding for Engie and EDP’s 30MW Éoliennes Flottantes Golfe du Lion project

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This is a feature from Windpower Monthly's June 2021 issue. Click here to read the full edition

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The European Investment Bank (EIB) played a key role in getting offshore wind energy started in Europe, taking on financing risks that many commercial banks were not willing to shoulder in the beginning. Now, the European Union’s lending arm sees itself doing the same for floating offshore-wind technology, says Alessandro Boschi, the head of the EIB’s renewable energy division.

Since 2003, the EIB has provided around €10 billion to support the construction of 9GW of offshore wind farms in Europe, equivalent to more than a third of current capacity. It continues to finance traditional offshore wind farms, but its contribution has become relatively less important as offshore-wind financing has become routine for many commercial banks.

“We think we will play a similar role in getting floating offshore wind off the ground and making it cheaper and more competitive, as well as in supporting the creation of a supply chain,” says Boschi. “The potential is huge for this technology and, with economies of scale, costs will come down.” Floating offshore-wind farms are likely to play a very significant role after 2030, he expects.

In 2018 the EIB provided a €60 million loan under the InnovFin Energy Demonstration Project programme for the 25MW WindFloat Atlantic WindFloat Atlantic (25MW) Offshoreoff Viana do Castelo, Portugal, Europe Click to see full details pilot, sponsored by Portuguese company Windplus at Viana do Castelo, off the coast of Portugal. That project was commissioned in July 2020 and was the world’s first bank-financed floating offshore wind farm.

The EIB has also approved funding for Engie and EDP’s 30MW Golfe du Lion (Leucate) Golfe du Lion (Leucate) (30MW) Offshoreoff Leucate, Occitanie, France, Europe Click to see full details (EFGL) and the 30MW EolMed (Le Gruissan) EolMed (Le Gruissan) (30MW) Offshoreoff Gruissan, Languedoc-Roussillon, France, Europe Click to see full details floating project sponsored by Quadran Energies Marines. Both sites are located off France’s Mediterranean coastline.

Levelling up

Outside floating wind, the EIB focuses on the less developed wind markets of the ten EU member states in central and eastern Europe (CEE). “Most of these countries are coming from a system that is more based on fossil fuels, so they require higher investments for the energy transition,” explains Boschi.

“We are having a dialogue with EU member states, and particularly those to the east, on their national energy and climate plans (NECPs), and discussing ways in which we can support the energy transition,” he says. “Many of these countries need to be more ambitious with their decarbonisation and renewable-energy targets, and also support the energy transition with adequate regulatory frameworks, which is not always the case now.”

Poland, the largest economy in the CEE region and still heavily dependent on coal power, has been a major beneficiary of EIB funds. Over the past three years, the bank signed three loans for Polish wind farms, providing financing to state energy group PGE, German developer Wpd and Pomerania Wind Farm, a subsidiary of Lithuania’s Ignitis Renewables.

As for new technologies, the EIB is also “looking very closely” at green hydrogen. “It has the potential to be a gamechanger for decarbonisation,” says Boschi, particularly in hard-to-decarbonise industries and some segments of transport. 

Historically, the EIB has invested €1-2 billion a year in wind. That is likely to increase, however, in light of the faster rollout of new wind and other renewable-energy capacity required by the EU’s more ambitious emissions-reduction commitments. “There is a huge investment challenge, and we are ready to do our part,” he says.

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