EnBW Energie Baden-Württemberg (EnBW) has arranged a $571m (€500m) long-term loan, supported by credit agency Export and Investment Fund of Denmark (EIFO), to fund its share of the SuedLink electricity transmission project.
This is the first instance of export credit agency (ECA)-backed financing being used for an investment in the German electricity grid.
The financing, which will run for 18 years and be amortised over this period, was provided by an international consortium comprising Crédit Agricole CIB, ING and HSBC.
The EIFO guarantee covers 95% of the outstanding loan amount, including interest charges.
EnBW said the loan’s terms are consistent with those of its other euro capital market bond issuances, and its structure allows for flexible drawdowns tied to the project’s progress.
EnBW Finance, M&A and Investor Relations SVP Marcel Münch said: “We are once again breaking new ground in financing the transformation of the energy sector in Germany. The €500m loan represents another key element in EnBW’s long-term financing strategy.
“In light of the continued high investment needs in grid infrastructure, this step allows us to further diversify our financing portfolio and secure attractive long-term conditions.”
SuedLink, a high-voltage direct current (HVDC) connection, will stretch for around 700km.
The transmission line aims to move renewable energy, primarily wind power from northern Germany to the southern regions of Bavaria and Baden-Württemberg.
Construction has commenced across all six of the federal states involved, with completion set for the end of 2028.
The project is being carried out jointly by TransnetBW, a subsidiary of EnBW, and TenneT Germany, with each company responsible for separate sections of the line. The planned investment is approximately €9.62bn.
Its new cables are considered central to Germany’s ongoing transition towards a greater proportion of renewable energy in the national grid.
Last month, EnBW started building a battery energy storage system at Philippsburg Energy Park in Germany, designed for 400MW of power capacity and 800MW-hours of energy storage.
