Investment consortium led by the EBRD pumps €315M into renewable energy company Renalfa
Renalfa IPP, an independent power producer based in Vienna, has secured €315 million in holdco financing to support its €1.2 billion investment program aimed at expanding renewable energy capacity and battery energy storage systems (BESS) across Bulgaria, Hungary, Romania, and North Macedonia.
The financing, led by the European Bank for Reconstruction and Development (EBRD), marks the first time the EBRD has used a first-loss guarantee under a hybrid model. The EBRD provided €100 million in loans from its own funds and mobilized an additional €100 million from commercial banks.
The EBRD loan is part of the European Commission's InvestEU initiative, aimed at mobilizing investment in support of EU policy priorities. Other lenders involved in the consortium include the Black Sea Trade and Development Bank, OTP Bank (Hungary), Nova Ljubljanska Banka (Slovenia), UniCredit (Italy), and Kommunalkredit (Austria), which also acted as financial advisor.
The financing will enable Renalfa to integrate battery energy storage systems into its renewable energy generation assets, helping to overcome intermittency challenges and improve grid stability. Once operational, these assets will deliver around 2.3 TWh of green electricity annually—enough to power approximately 920,000 households.
In addition to financing, the EBRD will support Renalfa in developing skills training programs for BESS. The training program will be a mixture of technical and non-technical training by an expert provider, resulting in an accredited certification. Renalfa will partner with local universities and technical colleges to develop a "training of the trainers component" for the BESS training program.
The aim of the training program is to ensure skills are passed on and are accessible to the wider population. Beyond this, Renalfa has pledged to encourage women's participation in the energy sector workforce.
Renalfa is a joint venture between Renalfa Solarpro Group and French infrastructure fund manager RGreen Invest. The EBRD has a long-standing relationship with Renalfa, having previously provided financing for several of its renewable energy projects.
The holdco financing is riskier than financing at operational company level because holding companies do not have other sources of revenue that can be used to repay their debt in the event that their operating companies are unable to upstream their cash. However, the first-loss guarantee from the European Union’s InvestEU program reduces risks related to merchant renewable power generation and new storage technologies, making the deal financially viable.
Despite market risks for merchant renewable power generation, as revenues depend on volatile wholesale electricity prices without the protection of long-term power purchase agreements, the financing for Renalfa IPP represents a significant step forward in the expansion of renewable energy capacity and battery energy storage systems across Central and Eastern Europe.
- The EBRD loan, part of the European Commission's InvestEU initiative, will not only support Renalfa IPP's investment program in expanding renewable energy capacity and battery energy storage systems, but also fund skills training programs for battery energy storage systems (BESS), aiming to create a wider population with the necessary skills.
- The financing secured by Renalfa IPP, led by the EBRD, will enable the integration of battery energy storage systems into their renewable energy generation assets, resulting in a more stable energy grid and annual delivery of around 2.3 TWh of green electricity, powering approximately 920,000 households.
- Renalfa, a joint venture between Renalfa Solarpro Group and French infrastructure fund manager RGreen Invest, has pledged to encourage women's participation in the energy sector workforce as part of their commitment to diverse business operations.
- While the holdco financing for Renalfa IPP is riskier than financing at operational company level, the first-loss guarantee from the European Union’s InvestEU program reduces risks related to merchant renewable power generation and new storage technologies, emphasizing the financial viability of the deal.
- The significant step forward in the expansion of renewable energy capacity and battery energy storage systems across Central and Eastern Europe, represented by the financing for Renalfa IPP, demonstrates a positive social impact by promoting renewable energy, energy transition, and sustainable finance in the industry, including real-estate businesses.
