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Perspective
26 July 2023

Bpifrance to launch guarantee fund for renewable offtakes

Region:
Europe
Managing Editor
France’s ECA Bpifrance is poised to launch a guarantee offering to boost the adoption of corporate power purchase agreements to lower the subsidy burden of renewables and manage electricity price fluctuation.

France’s export credit agency Bpifrance is set to roll out a guarantee scheme to promote the adoption of corporate power purchase agreements to reduce the subsidy burden of renewables and manage electricity price fluctuation. ECAs are increasingly innovating around extending support to buyers and exporters – coming in on deals off the back of offtake agreements and royalties providers rather than traditional export content. 

The Fonds de Garantie Energie Renouvelable scheme was announced in November (2022) with the French ECA lined up to operate the initiative.

An initial grant has been set aside – in the tens of millions, according to sources – to cover first losses with the expectation that funding will be upsized at a later date to cover more capacity.

Bpifrance in turn will provide guarantees against its own balance sheet to cover risks for industrial offtakers – which is expected to reduce the cost of external credit guarantees and making subsidy-free renewables projects more bankable.

The initiative will be launched with a first phase target of 500MW, while Bpifrance is working towards finalising its first contract by September this year. The guarantee will have a 10-year duration and will cover solar and onshore wind generation in mainland France.

Linklaters' Paris practice advised Bpifrance on the scheme's framework. Although a first for France, similar guarantees are already in use in Spain and Norway.

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