SACHSENENERGIE STROMNETZ SACHSEN

The project concerns investments in the electricity distribution grid in Saxony, Germany, for the period 2024-2029.

The project caters for demand growth, the connection of network users, the integration of renewables, and the improvement of the quality of service and the efficiency of operations.

The Project concerns standard electricity network investments in a regulated natural monopoly.

The Promoter's CAPEX plan includes investments in electricity distribution. The Project will contribute to maintaining or increasing security of supply in the context of growing electricity demand, from heating and mobility in particular, and growing integration of electricity production from RES.

The Project is expected to contribute to Bank's lending priority objectives on Climate Action and Environmental Sustainability and it aligns with the REPowerEU objectives. The financing of the Project will contribute to the Bank's ELP themes on Securing the Enabling Infrastructure (energy networks).

The operation addresses a number of market failures, including increasing security of energy supply, and the integration of low-carbon generation, which reduces carbon emissions and air pollution, with positive climate and health externalities.

The project is expected to deliver an excellent rated economic rate of return and excellent rated broader social benefits. The promoter is experienced in works of this nature and has a sound project management system in place.

In financial terms, the EIB loan is expected to allow the Borrower to diversify its funding sources (with first time financing from EIB) at attractive financial conditions, with a long term (25 years) and grace period (3 years), reflecting the average economic life of the assets and the time for project's construction/implementation. The EIB loan also allows a high flexibility in use of the line, with limited commitment fees over a 4 year availability period. In non-financial terms, the granting of the EIB loan is considered to have a positive signalling effect.

The project includes components that may fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU as amended by Directive 2014/52/EU, which requires the competent national authority to determine the need for an EIA. The impacts that can be typically expected for some schemes relate to visual impact, vegetation clearance, collision and electrocution of flying vertebrates, electromagnetic fields, noise nuisance, and disturbances during construction, as well as the possible impacts on protected fauna and flora (Habitats 92/43/EC and Birds 2009/147/EC).

The EIB will require the promoter to ensure that contracts for implementation of the project have been and will be tendered in accordance with the applicable EU procurement legislation: Directive 2014/23/EU / 2014/24/EU / 2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.