EQS-News: ABO Energy secures KfW financing for substations

Over the next two years, ABO Energy plans to build eleven substations in Germany to connect new wind, solar and battery parks to the grid. In the past, the Wiesbaden-based project developer has sold the substations it has built, together with the connected energy parks, on a pro rata basis to their operators. For strategic reasons, ABO Energy will in future take substations in Germany into its own portfolio. ‘This gives us long-term advantages when connecting future projects to the grid and opens up considerable potential for additional income,’ says Alexander Reinicke, Managing Director responsible for corporate finance.

ABO Energy has secured financing for the first eleven substations from the ‘Climate Protection campaign for Companies’ programme run by the state-owned Kreditanstalt für Wiederaufbau (KfW). The substations are scheduled to be connected to the grid by the end of 2027. The syndicated loan of 45 million euros was arranged by IKB Deutsche Industriebank AG as bookrunner and syndicate leader. Frankfurter Sparkasse and Taunus Sparkasse also participated in the syndicate. The first tranche was disbursed this week. Noerr Partnerschaftsgesellschaft advised ABO Energy on the conclusion of the syndicated loan agreement, while Clifford Chance acted as advisor to the banks. In the coming years, ABO Energy will have the opportunity to take out additional KfW-subsidised loans to finance further substations.

The investment volume for the eleven substations amounts to around 71 million euros. ‘Expanding our business model to include the operation of substations generates early and predictable cash flows,’ says Reinicke. ‘At the same time, the loan agreement concluded under the KfW programme strengthens our corporate financing.’ Overall, ABO Energy benefits from a sustainable strengthening of both its liquidity and earning power.