Enel, an Italian multinational manufacturer and distributor of electricity and gas, and the European Investment Bank (EIB), through its development branch EIB Global and SACE, an Italian export credit agency, agreed on a multi-country, multi-business, and multi-currency facility of up to €600 million (~$652 million) to support sustainable energy investments in Latin America.
Projects financed with this facility are expected to generate around 2,307 GWh of clean energy each year, equivalent to the annual consumption of 1.32 million households.
As part of the agreement, Enel Green Power Peru, a subsidiary of Enel Group, was granted $130 million to implement wind and solar PV projects for nearly 300 MW in Peru. The remainder of the €600 million (~$652 million) facility will support the growth of the Enel Group’s sustainable investments in Brazil and Colombia through renewable energy generation and power distribution projects.
The $652 million facility is linked to Enel’s ability to achieve its target for direct greenhouse gas emissions (Scope 1), measured in grams of CO2eq/kWh, equal to or below 148 gCO2eq/kWh by 2023, thus contributing to United Nations Sustainable Development Goal (SDG) 13 (Climate Action). Depending on the level of achievement of this target, the loan provides for a step-up/step-down mechanism that will trigger a margin adjustment.
“This evolution of sustainable finance will support long-term growth and a just transition, not only in Europe but also across Latin America, through a synergy between private and public players that aims to push sustainable development and accelerate the achievement of global sustainability goals in line with the Paris Agreement and the United Nations’ 2030 Agenda,” said Enel CFO Alberto De Paoli.
The transaction is in line with Enel’s Sustainability-Linked Financing Framework, updated in January 2022, which fully integrates sustainability into the Group’s global financing program, as well as with the EIB Climate Bank Roadmap. Moreover, the framework is in line with the International Capital Market Association (ICMA)’s “Sustainability-Linked Bond Principles” and with the Loan Market Association (LMA)’s “Sustainability-Linked Loan Principles”, as verified by the second-party provider V.E.
According to Mercom’s Q4 2021 solar funding and M&A report, total corporate funding across the globe in the solar sector, including venture capital and private equity (VC), debt financing, and public market financing, came to $27.8 billion, a 91% increase compared to the $14.5 billion raised in 2020. Corporate funding in 2021 was the highest in ten years.