EIB to provide strategic financial advice to three climate action projects

The European Investment Bank (EIB), one of the world's largest providers of climate finance, today signed three agreements with leading European innovators to collaborate on the development and potential financing of new projects that address climate change. Under a partnership with the European Commission delivered through the InnovFin Advisory programme, the EIB will provide strategic financial advice and support to RenFuel (Sweden), Bioforever (Netherlands) and Magaldi (Italy) to help prepare their climate action projects for potential financing.

All three projects address climate change by developing innovative, first-of-a-kind demonstration plants:

· RenFuel Lignolproduktion AB: A production plant for lignin oil (LIGNOL®) from lignin in black liquor from the pulp industry in Sweden. RenFuel's plant plans to extract 70 000 tonnes of lignin, which will result in an annual production capacity of approximately 185 000 tonnes of LIGNOL®.

· Magaldi Power: A first-of-a-kind plant based on a new solar thermal generation and storage concept in which a fluidised bed of sand generates green thermal or electrical power that is dispatchable on demand. The promoter is based in Italy and its demonstration project will be located in southern Europe.

· Bioforever: A demonstration-scale wood-to-ethanol biorefinery in the Netherlands, with a capacity of 35 000 tonnes of wood waste, producing 8 000 tonnes of ethanol per year.

The promoters and the EIB, through InnovFin Advisory – a programme supported by the European Commission to advise companies on how to structure their projects in order to improve their access to finance – will work on bringing the projects to maturity. The EIB will provide extensive knowledge sharing to each promoter and help them navigate the financing schemes that exist within and beyond the EIB, in order to bring these types of project to life. The Bank offers numerous options for companies looking for funding, such as corporate loans, project finance or venture debt.

This Project Development Assistance (PDA) is available to project promoters to increase the investment readiness of projects in innovative renewable energy, carbon capture and storage (CCS), smart energy systems and storage. The funding for the PDA originates from the NER 300 programme, which was set up by pooling together around €2 billion of overall support for innovative low-carbon technology, focusing on the demonstration of environmentally safe CCS and innovative renewable energy technologies on a commercial scale within the EU.

Future similar innovative climate action projects will also have the opportunity of PDA support, which will combine financial advice with technical and operational support at relevant points in the cycle, under the upcoming Innovation Fund. The future Project Development Assistance will be available from 2021 onward.

"If we want to achieve our ambitious climate action targets we need highly innovative technologies and flagship projects with European value-added that can bring about significant emission reductions. Our advisory services play a key role in structuring and maturing such innovative projects across all sectors to a stage where they become scalable and truly impactful. That is why I am very happy about today's agreements," said EIB Vice-President Ambroise Fayolle.

Clara De La Torre, Deputy Director-General for Climate Action, European Commission, said: "The European Green Deal puts great importance on supplying clean energy and channelling investments into innovation and clean-tech solutions to attain our ambitious climate goals. Now, with the EIB and the European Commission's financial support, we can help scale up low-carbon technologies and facilitate the transition towards climate neutrality. These successful projects aim to demonstrate an effective pathway for doing so."

RenFuel Lignolproduktion AB's CEO and Chairman, Mats Odell, said: "We are proud to be able to build this first-of-a-kind large-scale production plant for 185 000 tonnes of LIGNOL®, for which production is planned to start in the second quarter of 2023, thanks to the support of the EIB NER 300 programme in partnership with the European Commission."

Magaldi Power's CEO Mario Magald, said: "We are extremely glad that the European Investment Bank chose to support Magaldi in the development of its innovative storage technology known as STEM. This collaboration will be a fundamental step forward in supporting our entrance into the market."

Biofuel's CEO Anton Robek said: "Innovative first-of-a-kind projects typically have a high-risk profile and therefore access to finance is a challenge. On top of that, the COVID-19 crisis forced several potential strategic partners to focus on impact mitigation. As a consequence, there is a risk that the commercialisation of innovative projects that will contribute to CO2 emission reductions may be seriously delayed. Therefore, the support of the EIB to explore extensive funding options is very much welcomed."