Release date: 15 November 2023
Promoter – Financial Intermediary
SPECIAL PURPOSE ENTITY(IES)/FUNDLocation
Description
The Eavor Geretsried Project is the first commercial scale implementation of an innovative closed loop geothermal technology. It aims at generating baseload combined heat and power, through heat conduction transfer between rocks in the subsurface and a wellbore-isolated cycling fluid. The project will enhance the feasibility, competitiveness and scalability of the technology, by demonstrating its application to diverse geological settings. Such technology might possibly be applied to a wider range of locations compared to conventional geothermal energy.
Additionality and Impact
The Project supports the deployment and integration of a sustainable renewable combined heat and power source (geothermal) applying innovative technologies. It generates positive externalities in the form of reduced greenhouse gases and other hazardous emissions through the switching to a baseload source of sustainable energy. The Project also contributes at increasing learning-by-doing through the first commercialisation stage of an innovative sustainable technology, which should support costs reductions over time. The Project contributes to the 2030 national RE penetration targets of Germany, i.e. 80% RE in the power sector and 65% RE in the heating sector. The Project also contributes to maintaining or increasing safe delivery of energy.
The Project therefore addresses the following market failures: reducing carbon and air pollution externalities, security of supply and costs reduction of innovative low-carbon technologies.
The Project is aligned with EIB's Energy Lending Policy (Decarbonising Energy Supply and Innovation) and Climate Action (Mitigation / Renewable Energy) eligibility criteria and the policy contribution for Renewable Energy Sources is thus rated as Excellent.
The Project also complies with the eligibility criteria set out in Annex I-A of the InvestEU Agreement, in particular in relation to eligibility as per article 8.2, as the operation falls under the Thematic product (generation of clean, safe and sustainable renewable energy sources and solutions), through a technology at TRL 8. As a first-of-a kind commercial demonstration operation, the Project entails a
number of risks (credit, tehnology, construction, offtake) which cannot be fully mitigated due to its early-stage nature. This is combined with the limited experience of the Promoter as a start-up company.
EIB will be a key lender that will provide adequate terms and capacity to attract other specialized institutions to complete the funding plan of this project. The EIB financing further complements the EU Innovation Fund grant to provide a financial package which covers the distinctive risks of the Project. The Project would therefore not have been carried out (to the same extent) by the EIB without the InvestEU support.
Objectives
The objective is to support the integration of geothermal heat and power in the energy system and as a baseload source of energy with the aim to reduce emissions of greenhouse gases, in line with the EU and national renewable energy targets. The project will also contribute to further innovative technologies in the energy sector and thus contribute to learning-by-doing and positive knowledge externalities.
Sector(s)
- Energy - Electricity, gas, steam and air conditioning supply
Proposed EIB finance (Approximate amount)
EUR 75 million
Total cost (Approximate amount)
EUR 368 million
Environmental aspects
Based on the technical characteristics and information provided at this stage, the project is not expected to be subject to an Environmental Impact Assessment (EIA). This will be further confirmed at appraisal.
Procurement
The promoter, as a private undertaking operating in the utility sector, shall be subject to the applicable EU procurement legislation (Directive 2014/23/EU / 2014/24/EU / 2014/25/EU where applicable 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 (OJEU), as and where required, unless the project concession was obtained through open competition or the offtake contracts allow for specific exemptions. This will be further verified by the Bank at appraisal.
Status
Signed - 26/04/2024
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).