EBRD and EU sign €50 million financial guarantee to boost renewable energy in the EU Neighbourhood

• EBRD and EU to provide loans and unfunded risk cover for private sector renewable investments
• First EBRD guarantee programme supported by the EU’s External Investment Plan
• Ukraine, Jordan, Lebanon and Tunisia to benefit from wind and solar energy investments

The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) have signed an agreement on a new €50 million financial guarantee, as part of the EU External Investment Plan. The guarantee will help to scale up investment in renewable energy in Ukraine and in the EU Southern Neighbourhood, with a particular focus on Jordan, Lebanon and Tunisia.

The EBRD will provide guarantees to lenders, such as local commercial banks, which will allow them to provide financing to projects alongside the EBRD’s own loans. The guarantee will help to generate total investment of up to €500 million.

The projects will help unlock countries’ substantial renewable energy potential, promote the development of renewable energy more widely, and demonstrate how the private sector can help meet growing demand for energy. The guarantee is expected to provide 340 MW of additional installed renewable energy capacity. This translates into an extra 970 gigawatt hours per year of electricity production from renewable sources, and a cut in annual greenhouse gas emissions equivalent to 530 kilotons of CO₂.

Commenting, EU Commissioner for European Neighbourhood Policy and Enlargement Negotiations Olivér Várhelyi said: “The guarantee agreement we’ve signed today will help finance many more renewable energy projects, with private sector financing. It will cut greenhouse gas emissions, first in Ukraine and then in countries in the EU’s Southern Neighbourhood, with a particular focus on Jordan, Lebanon and Tunisia. In that way it will help them reach their targets under the 2016 Paris Agreement on tackling climate change. We’re convinced the guarantee provides sufficient risk cover to attract major private sector investment in countries where not enough such financing is available.” 

Commenting, EBRD President Sir Suma Chakrabarti said: “We’re delighted to partner with the EU for such an urgent cause as climate action. Our lending combined with the EU’s financial instruments encourages more participation of the private sector in investments which are very much needed to face the global challenges of the future, including a more sustainable development model. This first agreement is only the beginning of our cooperation with the EU through the External Investment Plan in the EU neighbourhood regions”.

The programme will have an important demonstration effect, introducing a number of new developers and commercial financiers to these markets.

This is the first EBRD guarantee programme to receive EU funding through the EU External Investment Plan. The EBRD will implement the largest volume and number of guarantees under the Plan for the EU Neighbourhood.