BOELS EQUIPMENT ELECTRIFICATION

The project will finance investments in electric equipment over the period 2023-2025, together with ancillary investments in digitalisation, electric vans as well as maintenance equipment for the electric fleet.

The aim is to replace fossil fuel-powered, polluting and CO2-emitting equipment with electric equipment for fleet renewal and modernisation. As such, the project will support the decarbonisation strategy and set an example to other companies operating in the sector.

The project concerns the purchase of zero/low emission electric rental equipment to replace the Promoter's fossil-fuelled fleet together with ancillary investments related to digitalisation and workshop modifications. The project will help to reduce energy consumption, avoid exhaust emissions, reduce noise emissions and reduce pollution from oils and lubricants during operation and maintenance.

The project addresses market failures by supporting investments in new state-of-the-art electric equipment to substitute fossil fuel powered, less energy-efficient and CO2-emitting rental equipment. The project will also help to rectify the insufficient level of investment in the circular economy in the EU and insufficient attention in the equipment rental sector for reducing energy consumption and extending the life of the assets. The project will strengthen the competitiveness of a European machinery and equipment rental company and will support the accumulation and diffusion of knowledge through collaboration with suppliers and customers.

The shift to electric equipment exposes the Borrower to additional risks compared to internal combustion engine (ICE) or non-electric alternatives. Firstly, it is unclear whether consumers are willing to pay the rental premium that it is necessary to compensate for the substantially higher purchase price of electric equipment versus ICE-equipment. Second, the useful life as well as the residual value of the latest electric equipment is unclear.

The EIB loan addresses the borrower's needs to (i) achieve greater financial flexibility by shifting its financing profile towards longer-term financing and (ii) diversify its lender pool. The proposed loan structure provides the borrower with the necessary flexibility to undertake the investments. Origination and appraisal of the operation has benefited from EIB technical expertise. Targeted regular monitoring will be applied.

The project concerns investments related to the electrification of the promoter's equipment, that are not specifically listed in Annex I or II of the EU Directive 2014/52/EU amending the Environmental Impact Assessment (EIA) Directive 2011/92/EU. The project will be carried out in existing facilities, already authorised, that will not change their scope due to the project. As such, the project activities are not subject to an EIA. The EIB will review the environmental aspects of the project during the due diligence process.

The promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. However, if at the project appraisal, the EIB were to conclude that the promoter is subject to the EU public procurement legislation then the Bank would duly inform the Commission Services and would require the promoter to apply those rules.