HELEN - GREEN TRANSITION CAPEX

Promoter – Financial Intermediary

HELEN OY

Location

• Finland

Description

The operation consists of an investment into two renewable energy heat generation projects in the district heating sector. The projects are: (i) heat pump plant (ii) fuel conversion from coal to biomass pellets.

Additionality and Impact

The Project concerns the construction of two District Heating (DH) generation units located in Helsinki. The first unit is a heat pump (90 MW) which will use recovered energy (excess heat from purified sewage water), the second unit (163 MW) is an existing coal plant converted to wood pellets. The renewable (RE) share of both investments is 100%, contributing to increase the overall RE share of Helsinki's DH system. The Project is in line with EU and EIB policy objectives on climate action (mitigation) and is also fully in line with national objective for increasing renewable and waste heat supply. It generates both environmental and health benefits, in particular by replacing coal-based generation with the integration of more sustainable and competitive sources of useful heat. This ultimately decreases energy costs and reduces carbon emissions, and air pollution. The Project also contributes to maintaining or increasing safe delivery of heat supply. The financing of this Project is therefore in line with the Bank's lending priority objectives for Energy (Decarbonising Energy Supply) as well as the transversal objective on Climate Action (Mitigation).

In terms of project results, the projects are expected to have a positive economic return, considering the economic value of the heat generated. Therefore, the project is expected to generate a broader positive social benefit by generating clean and renewable heat at a cost reasonably below the cost alternatives in Finland.

The project is supported by adequate governance and capabilities of the promoter.

The proposed loan will diversify the borrower's financing sources and thus strengthen the overall financing position of the company. The EIB loan's long tenor is highly valuable to the promoter in financing assets with long economic lifetimes. The Bank's loan complements Helen's other sustainable finance instruments and supports the company's investments related to carbon neutral energy systems.

Objectives

The aim is to substitute fossil-fuel based central heating with a more sustainable and efficient renewable generation mix, resulting in a reduction of greenhouse gases emissions and lower air pollution.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 150 million

Total cost (Approximate amount)

EUR 209 million

Environmental aspects

Regarding the compliance with the Environmental Impact Assessment (EIA) Directive 2011/92/EU (as amended by Directive 2014/52/EU), based on the information communicated by the promoter, the planned units will not have to undergo EIAs. The wood pellets to be used will need to comply with the EIB's sustainability criteria. The potential environmental and social impacts, the permitting processes, the promoter's environmental capacity, as well as the alignment with the relevant environmental legislation, will be reviewed during the appraisal.

Procurement

The Bank will require the Promoter to ensure that contracts for the implementation of the Project have been and will be tendered in accordance with the relevant applicable EU procurement legislation (Directives 2014/25/EU, and/or 2014/23/EU where applicable, as well as the Directive 92/13/EEC and/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.

Status

Signed - 18/04/2024