EBRD and Erste Approve Financing for the Pupin Windfarm in Serbia
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Insights
The $101 million loan for Enlight's windfarm project in Serbia signifies a pivotal advancement in the country's energy sector. The allocation of funds under the new renewables auction scheme not only underscores the strategic shift towards sustainable energy sources but also reflects a broader trend of increased investment in green infrastructure across Europe. As coal continues to dominate Serbia's energy production, the transition to renewable sources is essential for reducing carbon emissions and meeting international climate commitments.
This move could potentially influence energy prices and commodity markets, particularly in the European region where energy security and sustainability are pressing concerns. The windfarm's capacity to power over 40,000 households upon completion indicates a substantial addition to the national grid, which could decrease dependency on imported fuels and enhance energy independence. This strategic diversification can be seen as a hedge against volatile fossil fuel markets, which may attract investor interest in the region's renewable sector.
From a financial perspective, the collaboration between Enlight, EBRD and Erste is notable for its potential to yield significant economic benefits. The dual loan structure, with equal contributions from EBRD and Erste, demonstrates a strong vote of confidence in Enlight's project and the renewable energy sector of Serbia. This financial close is likely to be perceived positively by the market, as it may pave the way for future investments and signal the financial viability of large-scale renewable projects in emerging markets.
Investors should note the project's alignment with the 'Interconnection Expand' strategy, which leverages existing infrastructure for enhanced efficiency and returns. Such strategic synergies could lead to operational cost savings and higher profitability margins for Enlight. Moreover, the project's timeline, with commercial operations set to begin in the second half of 2025, provides a clear forecast for when the investment is expected to start generating returns, which is important for investor planning and risk assessment.
The Serbian government's commitment to renewable energy through the auction scheme represents a significant policy shift that aligns with global efforts to tackle climate change. The Pupin windfarm project serves as a benchmark for environmental and social governance standards in the region. The adherence to best practices in this realm can enhance Serbia's reputation and attract further international investment.
The policy implications of this project extend beyond immediate environmental benefits. By fostering a competitive market for renewable energy, the auction scheme encourages innovation and could lead to a decrease in the cost of clean energy technologies. This, in turn, can facilitate broader access to renewable energy solutions and contribute to socio-economic development. The project's success may also influence regional energy policies, potentially leading to a cascade of green initiatives across the Balkans.
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- EBRD and Erste arrange a
$101 million loan for Enlight’s second power plant in Serbia - The project is first to reach financial close under Serbia’s 2023 renewables auction scheme
- Ninety-four-MW windfarm to begin operating commercially in the second half of 2025
TEL AVIV, Israel, March 27, 2024 (GLOBE NEWSWIRE) -- Enlight Renewable Energy (“Enlight”) (NASDAQ: ENLT, TASE: ENLT), a leading global renewable energy platform, today announced The European Bank for Reconstruction and Development (EBRD), together with Erste Group Bank AG and its local bank Erste Bank a.d. Novi Sad (Erste), have approved a financing package worth
The EBRD and Erste will provide parallel loans, worth
Once commissioned, the Pupin windfarm will be able to supply clean, green electricity to more than 40,000 households, equivalent to the number of households in a medium-sized city like Zrenjanin. The windfarm will also help to reduce the carbon intensity of Serbia’s power sector and advance its green economy transition. Coal still dominates electricity production in Serbia and the financing package comes at a time when the country faces an urgent need to diversify away from fossil fuels to help address its long-term structural energy challenges.
This project was financed under Serbia’s first renewable energy auction for wind capacity, which took place in 2023 and awarded contract-for-difference for 400 MW. A second and third auction, each for 300 MW of wind capacity, are expected to take place in 2024 and 2025, respectively. Similar auctions will be held in parallel for solar power plants. The scheme was developed and launched with technical and policy support from the EBRD and was funded by the Swiss State Secretariat for Economic Affairs (SECO). The scheme encourages the market integration of renewables, as developers receive support in line with market prices, as well as income from the sale of electricity.
Matteo Colangeli, EBRD Regional Director for the Western Balkans, said: “Serbia’s decision to move ahead with auctions is proving to be a game changer in terms of unlocking the country’s renewable energy potential. We are pleased to see Pupin being the first project to reach financial close and moving quickly through implementation, proving that speed of execution and best practice in terms of environmental and social standards can go together. We are committed to support Serbia’s second wind and solar auction later this year to continue accelerating the country’s green transition.”
“Building the Pupin windfarm in close proximity to our existing Kovacica (Blacksmith) site represents a noteworthy implementation of our ‘Interconnection Expand’ strategy,” commented Gilad Yavetz, CEO and co-founder of Enlight Renewable Energy. “We were able to leverage the technical knowledge and transmission infrastructure that was already in place at Kovacica, resulting in greater efficiency and higher returns for Pupin. In addition, we were fortunate to engage once again with our partners EBRD and Erste for financing of the Pupin project; these are the same lenders who supported us in the development of the Kovacica site.”
Wolfgang Hargassner, Head of Corporate Finance at Erste Group, commented: “The financing of the first windfarm project under Serbia’s new renewable energy auction scheme marks a major step on the country’s path to green energy transition and we hope it will pave the way for other projects in the future. The realisation of the Pupin project is thanks to the great cooperation and unwavering commitment among all the parties involved, including investors, banks, advisers, the power off-taker, the turbine supplier, and many others.”
1 All amounts in U.S. dollars in this report are calculated based on a U.S. dollar to Euro conversion rate of 1 to 0.9035, as reported on 29 December 2023.
About Enlight
Founded in 2008, Enlight develops, finances, constructs, owns, and operates utility-scale renewable energy projects. Enlight operates across the three largest renewable segments today: solar, wind and energy storage. A global platform, Enlight operates in the United States, Israel and 9 European countries. Enlight has been traded on the Tel Aviv Stock Exchange since 2010 (TASE: ENLT) and completed its US IPO (NASDAQ: ENLT) in 2023. Learn more at enlightenergy.co.il.
About Erste Group Bank
Erste Group Bank AG is one of the leading financial services providers in central and eastern Europe, with more than 16 million customers and total assets worth more than
About European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development (EBRD) is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 36 economies across three continents. The Bank is owned by 72 countries as well as the EU and the EIB. EBRD investments are aimed at making the economies in its regions competitive, inclusive, well governed, green, resilient and integrated.
Investor Contact
Yonah Weisz
Director IR
investors@enlightenergy.co.il
Erica Mannion or Mike Funari
Sapphire Investor Relations, LLC
+1 617 542 6180
investors@enlightenergy.co.il
FAQ
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