Why international capital is so excited about renewables in CEE?

Why we’re excited about the region?

At Holocene we are working with a number of international funding partners who have a specific mandate to invest in and lend to projects within Central and Eastern Europe (CEE). This is why we are looking to support local developers by providing access to international capital to grow their businesses.

Where?

For starters, it might be helpful to clarify what we mean by the CEE. According to the OECD, the CEE is made up of Albania, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia.

How much?

While it might sound like a diverse group of countries with little in common, with a population of over 107 million people, you would be foolish to discount them. Within the EU itself, the region accounts for:

23% of its population
28% of its landmass
11.61% of its GDP
19% of its energy demand
8% of its wind capacity
10% of its solar capacity

What stands out is that the region punches above and below its weight. Given its population, size, and energy demands, the region definitely accounts for a sizeable chunk of the EU.

However, in terms of its GDP and renewable energy capacity, there’s a lot of room to grow.

How CEE is changing?

The region can be broken into 3 buckets: the outlier, the middle of the pack, and up and comers.

The Outlier

In the first camp, we have Albania which has consistently been relying on renewable sources of energy for 100% of its electricity needs since 2012 due to the abundance of hydropower in the country.

Despite its success, climate change poses a significant risk, and the country is looking to diversify its share of energy away from hydropower with worries about droughts in the future. This leads to potential investment opportunities in both solar and wind projects.

The Middle of the Pack

The second group in the middle of the pack include Croatia, Estonia, Latvia, Lithuania, and Romania. Amongst these nations, their share of renewables account from nearly 40% to nearly 70%. They have made significant progress and investments in the past having increased their renewable electric output by 53.64% from 2008-2022, though there is still room to improve.

Romania, for its part, has been included in the latest edition of Ernst & Young’s (EY) latest Renewable Energy Attractiveness Index (REAI) due to its plans to develop 2 GW of solar and wind projects.

The Up and Comers

That leaves us with the up and comers of Bulgaria, the Czech Republic, Hungary, Poland, Slovakia, and Slovenia. While their numbers currently fall well short of Albania, the reason for optimism is the market potential. With the average country of this group producing only 21.44% of their electricity from renewable sources, and a combined population of over 65 million, the upside is enormous.

Of particular interest is Poland which came in at 15 out of the 40 countries included in the REAI which has demonstrated significant investments in renewables, albeit from a low base.

How can we help?

At Holocene, we are uniquely positioned to support renewable energy projects within the region requiring both debt and/or equity solutions.

Working with a diverse group of international funding partners including banks, private equity firms, and non-bank lenders, we can identify solutions that fit the specific needs of the project whether it be speed, flexibility, and hands-on support.

If you would like to learn more about how we can support your greenfield and brownfield projects in the CEE region, get in touch with us at [email protected]