Umweltbank finances 110 MW solar project in Germany

From pv magazine Germany.

German green lender Umwelt AG will provide a €55 million loan for the nation’s largest unsubsidized solar power project – developer Anumar’s 110 MW Schornhof solar park, which is under construction in Bavaria.

Anumar has secured the signature of Norwegian renewables company Statkraft on an 11-year power purchase agreement (PPA) for 50 MW of the generation capacity of the €60 million project and negotiations are under way to contract the sale of power from a further 30 MW at the site. The developer has been awarded a feed-in premium contract for 30 MW of Schornhof’s capacity, allocated in Germany’s tenders for large scale PV.

Umweltbank, which finances only environmentally-friendly projects, said the loan is its largest investment to date in PPA-backed renewable energy projects. Thomas Benz, the lender’s deputy head of energy and infrastructure, told pv magazine several loans had been granted for solar projects in recent months, but they were for sub-10 MW scale facilities. In terms of lending for PPA-driven projects, he said: “At the end of last year, we had a slow start but we were able to learn and gain experience. Now the bigger projects are coming.” The bank has fielded finance requests for 300 MW of solar projects, Benz said, in the form of power plants with generation capacities ranging from 8 MW to 100 MW.

The Umweltbank representative said the market is starting to regain ground after the Covid-19 crisis drove down electricity prices, halting the European PPA market.

“We are seeing a slow recovery,” said Benz, in reference to solar facilities for which PPA negotiations had begun before the arrival of the new coronavirus in Europe. He said large sites suitable for solar project development are once again being sought.

Benz said Umweltbank can give an initial funding decision within two weeks, provided all permits are in place for planned projects. A final decision usually comes within eight weeks of the application but the Umweltbank representative said the lender’s experience in the market had demonstrated it can reach a decision quicker if it has been involved in PPA negotiations from the outset.

Standard PPAs

The bank now wants to develop standardized PPA contracts to reduce the time needed to reach funding decisions. “PPAs will not be able to replace tender projects and systems up to 750 kW, but they will still be an important third pillar for the further development of photovoltaics in Germany,” said Benz.

At the Schornhof solar project, the change of use from agriculture to solar farm, and its attendant biodiversity benefits, attracted Umweltbank. Referring to the fenland where the plant will be located, the lender stated: “The Donaumoos area has been used intensively for agriculture. By operating the solar park, the areas can recover in the long term.” Reducing drainage at the site should raise the groundwater level and the bank added: “New meadows are being created under the solar modules that promote biodiversity.”