By Nigina Mirbabaeva
Highlights
- EBRD lends 22 million to Estonia-based KC Solar2 OÜ
- Loan, supported by the EU, will finance construction of 45 MW solar park
- Investment to support the country's green transition goals and energy security
The European Bank for Reconstruction and Development (EBRD) is supporting the development of solar energy in Estonia by lending 22 million to KC Solar2 OÜ to finance the construction of a 45 MW solar park in the town of Kehra. The EBRD loan benefits from first-loss risk cover by the European Union (EU) under its InvestEU programme.
In line with the EU's strategic renewable energy goals, Estonia has an ambitious target of ensuring that 65 per cent of its final energy consumption comes from renewable energy by 2030. It also seeks to have 100 per cent of its electricity generated from renewables by 2030. Consequently, developing Estonia's solar energy potential is critical to supporting these goals and safeguarding Estonia's energy security.
Once fully operational, the Pihlaka solar farm is expected to generate 41,230 MWh annually to be sold on the open market. This will not only make a significant contribution to greening Estonia's electricity grid, but also make it more competitive.
Tomas Kairys, EBRD Head of the Baltic States, said: "This is one of the first renewable energy projects in the Baltic countries to be structured on a fully merchant basis. It paves the way for a more competitive and liquid electricity market in Estonia, and demonstrates the commercial viability of renewable projects in Estonia for other developers and financiers, with the potential to unlock much more investment in the renewables space in the region."
KC Solar2 OÜ is a special purpose vehicle incorporated in Estonia, established for the sole purpose of developing, constructing and operating a portfolio of two solar photovoltaic power plants with a total capacity of 52.5 MW. The Bank's loan will finance the development, construction and operation of the 45 MW Phase 2 of the project. KC Solar2 OÜ is 100 per cent owned by KC Energy OÜ, an Estonian renewable energy developer, which owns and operates nearly 83 MW of solar farms across the country and has more than 500 MW of solar and wind farms in the pipeline, as well as storage solutions for managing renewable energy.
The EBRD is a leading institutional investor in Estonia. To date the Bank has invested 974 million in 112 projects across the country. Supporting Estonia's green economy transition by investing in energy efficiency and renewable energy is a key priority for the EBRD.
