📋 Tender Overview
EIB
The new guarantee from the European Investment Bank (EIB) will help secure further financing to expand electricity grids in Germany and other EU countries.
The cooperation will strengthen supply chains for grid components and accelerate the energy transition by increasing investment in electricity grids.
Signed at Hannover Messe, the agreement highlights the importance of robust power grids for households and the economy.
The EIB and Commerzbank signed a new cooperation agreement at Hannover Messe that will enable investments of up to €2 billion in electricity grids in Germany and other EU Member States.
The cooperation will address key financing bottlenecks for grid expansion and upgrades, which are crucial for integrating renewable energy and reducing energy costs for businesses and households.
To achieve this, the EIB is providing Commerzbank with a guarantee of €250 million, which in turn enables Commerzbank to offer more guarantees for component manufacturers. This will help strengthen supply chains for cables, transformers and other equipment, and mobilise grid investments totalling up to €2 billion.
Neil Aiken, Divisional Board Member Lending at Commerzbank, said: “As a leading bank for German SMEs and a key energy industry partner, we see every day how large the investment and financing needs for grid infrastructure are. The EIB guarantee strengthens our capacity to address these needs and helps ensure a secure, affordable and sustainable energy supply in Germany and across Europe.”
EIB Vice?President Nicola Beer said: “With this new partnership, we are creating sorely needed room for manoeuvre in accelerating the expansion of Europe’s electricity grids and making them fit for a climate?neutral energy system. Without efficient grids, wind turbines, solar panels and heat pumps go unused – we would miss the energy transition, literally sitting in gridlock. Our cooperation with Commerzbank will support investments of up to €2 billion in new lines, transformers and smart infrastructure, make the energy supply more resilient, and help reduce energy costs for people and businesses in the long term.”
Clear and growing need to expand EU power grids
The energy transition is increasingly localised in the electricity grid – especially lower voltage levels, into which much of the electricity from renewable sources will be fed in future. Grid operators anticipate a sharp rise in investment for grid expansion by 2030, and a clear majority expect spending on this to increase substantially.
Huge amounts of materials will be required to meet the need: By 2045, it’s estimated that Germany’s grids will need more than half a million additional kilometres of cables and transformers. Investment projections for the German electricity grids by 2045 total around €431 billion – that’s around €20 billion per year, almost four times the amount in 2022.
At the same time, operating costs are rising significantly due to grid bottlenecks and system interventions. In 2023 alone, more than 27 000 GWh of electricity had to be balanced through redispatching, costing around €3.2 billion. Bringing these costs down in the long term will take not just physical grid expansion on a massive scale, but also increased digitalisation and intelligent control across the grid.
Operators see digitalisation, smart grids and intelligent metering systems as key to increasing transparency and controllability, and to improving how existing grids are utilised. Among other things, they expect greater transparency on consumption and feed?in, better integration of new load sources like heat pumps and e?mobility, and more efficient maintenance of infrastructure.
How the EIB backs Commerzbank financing for the grid
The cooperation will take place under a new EIB Grid Package that supports financing for electricity grids and storage by strengthening European supply chains for grid equipment.
For that, the EIB is providing Commerzbank with a portfolio guarantee of up to €250 million, covering up to 50% of the risk arising from performance and advance payment guarantees for equipment manufacturers.
These guarantees are standard in grid construction to protect operators and development firms against the risk of supplier failure to complete projects in accordance with contracts, or to deliver against advance payments. As Europe’s market for grid components is dominated by a handful of large original equipment manufacturers (OEMs) and only a few banks offer such guarantees, institutions are increasingly running up against regulatory risk and concentration limits.
The EIB guarantee lets Commerzbank partly share out its risk exposure to OEMs, free up regulatory capital and provide more guarantees. This increases financing capacity for new lines, substations, transformers and cable connections in Germany and other Member States, for faster implementation of expansion projects.
“With the new EIB Grid Package, we are transferring the successful risk?sharing model from our wind package to the electricity grid,” Beer said. “We are helping banks like Commerzbank meet the swiftly rising demand for guarantees in the grid sector, making a real contribution to REPowerEU and the European Green Deal.”
One part of a broader EIB initiative for power grids and wind
The new cooperation with Commerzbank is the first transaction under the pan?European EIB Grid Package, which will enable investments in numerous electricity grid projects across the European Union. Each operation under this programme helps mobilise additional grid investments of up to €4 billion, while also strengthening the industrial base for grid equipment in Europe.
The EIB Grid Package builds on an existing initiative for the wind energy value chain, under which the EIB and partner institutions like Commerzbank are already providing risk mitigation for wind turbine manufacturers. Commerzbank is a partner in that wind initiative as well as in the Growth for Energy programme, which supports fin
