EIB and SaarLB to drive renewable energy development. Credit: European Investment Bank.

The European Investment Bank (EIB) has signed a €70m guarantee agreement, offering additional scope to Landesbank Saar (SaarLB) to invest in renewable energies.

Under the terms of the agreement, EIB has agreed to guarantee up to 50% of the value of up to ten of SaarLB’s existing loans for wind and solar power projects in France and Germany.

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EIB vice-president Ambroise Fayolle said: “Climate action is one of the EU bank’s top priorities, and of all international financial institutions worldwide, we are the biggest financier of climate action projects.

“We apply modern and innovative financing techniques such as this one, where we are partly taking on the direct financial risk of SaarLB’s loans for the first time while leaving risk management and mitigation to them.

“Of all international financial institutions worldwide, we are the biggest financier of climate action projects.”

“This is made possible by the support of the European Fund for Strategic Investments and our partnership with SaarLB, with which we have been working very closely, constructively and successfully for many years.”

With EIB’s partial risk participation, SaarLB will be able to grant additional loans of almost €140m for new renewable energy projects in both the countries.

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The transaction is said to be the second tranche of a €150m guarantee framework between the EIB and SaarLB, with the first EIB guarantee for €80m signed two years ago.

SaarLB management board member Frank Eloy said: “The financing of projects relating to renewable energies has been an important area for SaarLB for years. To date, we have focused on financing medium-sized projects relating to wind and solar energy in France and Germany.

“As part of the ongoing development of our business model in this core business area for the bank, we will expand our range of services to financing geothermal projects, as well as possibly to Belgium and Luxembourg.”