Investment & Fund Management

The European Investment Bank (EIB) and its subsidiary, the European Investment Fund (EIF), have collaborated with the German green tech company Enpal to create Europe’s first public solar asset-backed securities (ABS) transaction, valued at €100 million. This innovative financing solution addresses the high acquisition costs that have historically hindered homeowners from adopting solar energy. Enpal, which offers a comprehensive renewable energy solution including solar panels, battery storage, and electric vehicle chargers, aims to make clean energy more accessible through this new financial instrument.

In this transaction, the EIB acted as an anchor investor, contributing €50 million, while the EIF provided an additional €50 million in the form of an embedded guarantee. This structure not only supports Enpal in attracting private investors but also establishes a new asset class for private solar systems in Europe, similar to the financing models used for car loans. By selling €240 million of its claims from 8,500 photovoltaic systems to a Special Purpose Vehicle (SPV), Enpal has successfully placed these claims on the capital markets, marking a significant step in mobilizing financing for residential solar installations.

The results of this collaboration are multifaceted. The EIB and EIF's involvement has enhanced the liquidity and transferability of the ABS notes, effectively transforming them into a quasi-European Safe Asset rated as AAA. This innovation is expected to encourage the growth of a European green securitisation market, making renewable energy solutions more affordable for private households. Enpal's financing model, which includes attractive interest rates, allows the company to offer better financing solutions to its clients, thereby promoting the adoption of renewable energy across Germany and potentially throughout Europe.