EIB and Deutsche Bank team up to support EU wind power industry

By Vera Eckert

FRANKFURT (Reuters) - The European Investment Bank (EIB) will provide a 500 million euros ($540 million) guarantee to Deutsche Bank to help the lender support Europe's wind power industry, the two organisations and the European Commission said on Wednesday.

The so-called counter guarantee is the first in a 5 billion euros initiative mapped out by the European Union's development bank in December to boost wind power capacity in the bloc.

That came after the Commission presented a package aimed at enlisting commercial banks' support for increasing the roll-out of renewable energy to help meet climate policies and improve energy security in the wake of Russia's invasion of Ukraine.

Counter-guarantees are promises to cover losses if a borrower defaults on a loan.

The EIB's move is designed to enable Deutsche Bank to set up a portfolio of up to 1 billion euros of guarantees for investments in wind generation and grid connections.

The 1 billion euros portfolio is expected to spur up to 8 billion euros of investments by companies or individuals, the three organisations said in a joint statement.

Wind equipment makers face challenges including uncertain demand, slow project-permitting, and supply-chain bottlenecks, as well as high inflation and commodity prices.

Chinese rivals are also expanding in the EU with low price products.

The EIB's 5 billion euro initiative could support the building of 32 gigawatts (GW) of new wind capacity, contributing towards an EU target for 117 GW of new capacity by 2030.

($1 = 0.9246 euros)

(Reporting by Vera Eckert; Editing by Mark Potter)