-- The European Investment Bank and Commerzbank have agreed on a new cooperation that could unlock up to 2 billion euros ($2.4 billion) in investment for electricity grids in Germany and other European countries, the financial institutions said on Tuesday.
The deal is designed to ease financing bottlenecks that have slowed the rollout of grid infrastructure needed to integrate renewable energy.
Under the deal, the EIB will provide Commerzbank with a 250 million euros guarantee, enabling the German lender to extend more guarantees to manufacturers of critical grid components such as cables and transformers.
The arrangement is expected to strengthen supply chains and accelerate infrastructure upgrades needed for Europe's energy transition.
"Without efficient grids, wind turbines, solar panels, and heat pumps go unused," Nicola Beer, EIB vice president, said. "Our cooperation will support investments in new lines, transformers, and smart infrastructure, and help reduce energy costs over time."
EIB said that Europe faces a sharp rise in grid investment needs as it shifts to renewable energy. Grid investment in Germany alone is projected to reach about 431 billion euros by 2045, with annual spending expected to rise to about 20 billion euros.
Grid constraints are already proving costly. More than 27,000 gigawatt-hours of electricity had to be balanced through redispatching measures in 2023, at a cost of about 3.2 billion euros, underscoring the urgency of expanding and modernizing infrastructure.
The deal between the two banks also supports the EU's wider energy strategy, including REPowerEU and the European Green Deal, which seeks to boost energy security, cut emissions, and reduce price volatility.