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EBRD borrows €22 million for 45 MW solar farm in Estonia, boosting renewable energy targets

Posted on by darion

Representative image. Source: Canva

The European Bank for Reconstruction and Development (EBRD) is boosting Estonia’s solar energy potential with a €22 million loan to KC Solar2 OÜ. This funding will finance the construction of a 45 MW solar park in Kehra. The loan is subject to first loss risk by the European Union (EU) under the InvestEU program.

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Aligning with the EU’s renewable energy targets, Estonia aims for 65% of its final energy consumption to come from renewable sources by 2030 and plans for 100% of its electricity to be generated from renewable sources by the same year. Developing Estonia’s solar energy potential is essential to achieving these goals and increasing the country’s energy security.

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Once operational, the Pihlaka solar farm is expected to generate 41,230 MWh per year, which will significantly contribute to greening the Estonian electricity grid and increasing its competitiveness.

Tomas Kairys, EBRD Head of Baltics, noted: “This is one of the first renewable energy projects in the Baltics with a fully commercial structure. It paves the way for a more competitive and liquid electricity market in Estonia and demonstrates to other developers and financiers the commercial viability of renewable energy projects, with the potential to unlock much more investment in the renewable energy sector in the region.”

KC Solar2 OÜ, a special purpose vehicle based in Estonia, is responsible for the development, construction and operation of two photovoltaic power plants with a total capacity of 52.5 MW. The EBRD loan will specifically finance Phase 2 of this 45 MW project. KC Solar2 OÜ is wholly owned by KC Energy OÜ, an Estonian renewable energy developer that currently owns and operates nearly 83 MW of solar farms across the country and has over 500 MW of solar and wind projects in the pipeline. , along with renewable energy storage solutions.

The EBRD is the leading institutional investor in Estonia, having so far invested EUR 974 million in 112 projects across the country. Supporting Estonia’s transition to a green economy through investments in energy efficiency and renewable energy remains a key priority for the EBRD.