Photo: Finance in Motion / LinkedIn
The Green for Growth Fund has signed a series of agreements on green lending and support for major solar power and energy storage projects throughout the Western Balkans. The new commitments, backed by an investment from KfW, will lift its green financing portfolio in the region by up to EUR 176 million.
At the EU–Western Balkans Investment Forum in Tirana, held in October, GGF announced the European Union’s EUR 20 million investment in its class C shares, via Germany’s KfW Development Bank. It was accompanied by a EUR 4 million donation to the climate action fund’s capacity building and advisory facility, its advisor Finance in Motion said.
The proceeds are set to mobilize more private capital for renewable energy, energy efficiency and climate resilience across the region, the update revealed.
The Green for Growth fund signed a series of agreements at the forum for green lending, and for financing solar power and battery projects in North Macedonia, Kosovo* and Albania.
Von der Leyen: The time to invest in the Western Balkans is now
The event was attended by European Commission President Ursula von der Leyen and Albanian Prime Minister Edi Rama.
“Your economies are already set to grow rapidly in the coming years. We established the Western Balkans Growth Plan for exactly that. The EU opens sectors of its economy for your business. Together, we work on reforms for a level playing field. And alongside reforms comes investment. The Western Balkans Growth Plan aims at doubling regional GDP in the next decade. So my message to investors today is straightforward: Do not let this opportunity pass by. The time to invest in the Western Balkans is now,” Von der Leyen said.
The commitments signed within a special segment of the Tirana conference are boosting the fund’s cumulative investments into the region to more than EUR 850 million. Earlier it provided over EUR 675 million overall in green finance in the Western Balkans in support of climate action, energy security and sustainable industry.
The new commitments are expected to avoid emissions of some 175,000 tons of CO2. It is equivalent to 400,000 barrels of oil not being burnt.
Trailblazing investments ahead in photovoltaics, BESS
The Green for Growth Fund intends to provide funding for one of the first grid-scale battery projects in North Macedonia and the Western Balkans.
Renalfa IPP is about to expand its 50 MW photovoltaic plant in Oslomej, on the site of a former coal mine, with a 200 MWh battery energy storage system (BESS). GGF has already provided debt financing for the solar installation, and the two sides signed a mandate letter for EUR 24 million for the BESS investment. It is one of the investments for the transformation of the REK Oslomej coal mine and power plant complex.
Renalfa IPP’s pioneering PV plant Oslomej on coal land will get a battery facility
GGF also signed a term sheet for Quant Renewables’ solar power project in Kosovo* for 142.2 MW in peak capacity. It comprises PV plants Tucep (98.5 MW) and Veriq (43.7 MW) on land previously designated for lignite mining.
The Green for Growth Fund would support it with up to EUR 12 million in preferred equity, complementing senior debt financing led by the European Bank for Reconstruction and Development (EBRD). Set to become Kosovo’s* biggest solar park, its estimated annual output would match the electricity needs of 63,000 households.
The facility would save an estimated 168,138 tons of carbon dioxide equivalent per year (22,529 tons prorated to GGF’s investment).
The third renewables project is HD Solar Park in Albania. Through a letter of intent, GGF expressed its goal to provide up to EUR 30 million in senior debt financing. Bindi, the developer, has envisaged 60 MW of peak capacity and a co-located 120 MWh battery system. It would be one of the first large-scale solar-plus-storage initiatives in the country.
Five new deals with financial institutions for as much as EUR 110 million in total
The partner financial institutions that signed agreements with the Green for Growth Fund will channel the financing to their clients for investments in renewables, sustainable mobility, and energy and resource efficiency in buildings and industrial production.
There are five new deals for as much as EUR 110 million in credit lines and subordinated loans.
Two credit lines for partners in Kosovo*
The KRK microfinance institution in Kosovo* aims to utilize a new credit line, of EUR 5 million, for efficiency refurbishments and retrofits of the residential sector as well as small-scale renewable energy. It would be its sixth investment with the Green for Growth Fund since establishing the partnership in 2017.
BpB, the first bank in Kosovo* founded with fully local capital, finances households and small and medium-sized enterprises. Building on a previous partnership, it will channel GGF’s senior credit line of EUR 5 million into energy efficiency and renewable energy.
It will particularly benefit SMEs, including clients in the agricultural sector seeking to upgrade energy systems or invest in low-carbon vehicles, efficient equipment and modern irrigation systems, the fund added.
EUR 95 million in total for Serbian lenders
The Green for Growth Fund signed a loan agreement with UniCredit Bank Serbia for a EUR 50 million senior credit line. The focus is on commercial-scale solar and wind power, helping decarbonize Serbia’s coal-dependent electricity system.
GGF expects it to become one of the fund’s most impactful investments, by avoiding 84,550 tons of emissions in CO2 equivalent terms – equivalent to taking 44,500 cars off the road. The fund has invested EUR 115 million in UniCredit Bank Serbia to decarbonize the country’s electricity system.
Another Serbian lender in the group is AikBank, eligible for a EUR 45 million subordinated loan. The deal is for financing renewables and energy efficiency projects of corporate clients.
The bank will additionally benefit from GGF’s technical assistance for technical due diligence and environmental and social assessments, for the implementation of green energy projects in line with the best practices, the partners stressed.
ProCredit Bank in BiH is eyeing solar power projects
ProCredit Bank in Bosnia and Herzegovina is getting a subordinated loan of up to EUR 5 million, following two such facilities in 2022 and last year. The Green for Growth Fund’s investment is for maintaining the partner’s capital position and supporting the expansion of its green portfolio. The bank especially sees opportunities in solar power, where there is significant potential for BiH to catch up with regional leaders.
“We thank our investors for their continued confidence. This kind of catalytic capital drives tangible impact in Southeast Europe and shows how aligning investment with ambitious climate goals accelerates the green transition,” Finance in Motion said.
* This designation is without prejudice to positions on status and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.
Be the first one to comment on this article.