The European Investment Bank (EIB) and its subsidiary the European Investment Fund (EIF) has backed the German energy company Enpal in creating Europe’s first public solar securitisation, worth €100 million.
Enpal, a German unicorn, runs a one-stop-shop offering an integrated renewable energy solution, consisting of solar- and battery-equipment, electric vehicle chargers, heat pumps and a smart energy manager.
As of today, high acquisition costs still prevent many European homeowners from switching to solar energy,” said the EIB.
“Enpal, together with the EIB Group, wants to change this and has launched an innovative financing instrument for private solar systems on the capital market.
“Similar to how the securitisation of loans once enabled the financing of cars for the general public, this model now opens up a new asset class for private solar systems, making clean energy affordable.”
In this transaction, the EIB acted as an anchor investor with €50 million. The EIF provided an embedded guarantee of additional €50 million.
The EIB added: “The advantages of this transaction are as follows: The EIB Group`s engagement supports Enpal in attracting private investors on the capital market.
“By this, the EIB-Group also encourages the establishment of a European green securitisation market which will make renewable energy solutions more accessible to private households.
“Homeowners will also benefit: The interest rates paid to the EIB, will partly be returned to Enpal, which allows Enpal to structure an even more attractive financing solution to its clients. The overall financial structure is an asset backed securities (ABS) transaction: Enpal sold €240 million of its claims against customers, generated by selling 8.500 PV-systems to households, to a Special Purpose Vehicle (SVP).
“The SPV placed these €240 million on the capital markets in form of the first residential solar ABS-bond in Europe. The participation of the EIB and the EIF has backed Enpal to refinance its sold PV systems.
“Solar-ABS transactions are already quite common in the US to mobilise financing for the installation of solar energy, but not yet in Europe. By acting as an anchor investor in this first European solar ABS- transaction, the EIB-Group encourages the establishment of a European green securitisation market which will make renewable energy solutions more accessible to private households.”
EIB Vice-President Nicola Beer said: “Small scale renewable energy solutions in private homes can make a big difference on our way to a net-zero economy. The EIB-Group is therefore proud of creating innovative financial products that boost investment for this purpose across Germany and the EU.
“We are glad to have found an ideal partner in Enpal to bring this financial innovation to life, helping to set up the foundation for similar financial products for the European Capital Markets Union.”
EIF CEO Marjut Falkstedt said: “This securitisation transaction with Enpal underscores our commitment to support the swift roll-out of renewable energy technologies to residential homes in Germany, ultimately fostering climate action and environmental sustainability as we navigate the green transition. At the same time, this is a great example of how securitisation operations can contribute tangibly to the drive towards a greener future.”
The EIB added: “The EIB directly invests €50 million in part of the senior tranches, by this creating trust into the transaction on the capital markets, while the EIF provides a supranational wrap on another senior tranche. Such embedded guarantee effectively transforms the underlying ABS notes into a quasi-European Safe Asset rated as AAA, with an enhanced liquidity and transferability.
“Such structures are an integral part of a securitisation platform that aims at increasing the appeal of securitisation instruments and improving the well-functioning of the European capital markets union.”