Highlights
- EIB, EIF, European Commission's InvestEU join forces to drive green transition in Poland
- Agreement will allow Inbank to extend PLN 701 million (over 160 million) in new financing
- Inbank to issue new loans to individuals for solar panels and heat pumps
- Agreement marks EIBG's first entirely green InvestEU securitisation in Poland
The European Investment Bank Group (EIBG) signed its first synthetic securitization transaction backed by solar panel loans to private individuals in Poland with Inbank, an Estonian financial technology company with an EU banking license. The transaction, which is also Inbank's first securitisation, will allow the bank to offer up to PLN 701 million (over 160 million) in new lending in the next three years to private individuals in Poland willing to install solar panels and heat pumps.
"The agreement signed with Inbank today touches on an important aspect of energy transition: providing green support to private individuals. As the EU's climate bank, we actively support multiple parts of the energy transition puzzle. Our cooperation with Inbank allows us to reach private consumers to help them make the most of green transition," said EIB Vice-President Teresa Czerwińska. "This is the EIBG's first fully green InvestEU securitisation in Poland. The complex financial architecture of the agreement showcases creative approach by the EIB and EIF seeking to get even more bang for the buck in driving green transition."
Under the terms of the agreement:
- EIF offers protection on the senior, or the least risky tranche, worth over PLN 549 million, half of which is counter-guaranteed by the EIB;
- EIF also provides protection on more than PLN 76 million of the riskier mezzanine tranche, which is counter-guaranteed by the European Commission's InvestEU programme;
- the junior tranche, the most risky part of the structure, is worth around PLN 10 million and retained by Inbank.
The securitisation structure features synthetic excess spread and pro-rata amortisation of the senior tranche and the mezzanine tranche, subject to performance trigger.
"We are glad to be partnering with Inbank for their first securitisation transaction. The agreement signed today ticks several important boxes: it will inject significant new funding into the Polish economy for sustainable investment; it will have a very direct impact for private individuals. And, last but not least, it serves as a fine example of a three-way cooperation between the EIB, EIF and the European Commission that leverages innovative financial instruments under InvestEU in support the green transition," said EIF Chief Executive Marjut Falkstedt.
The agreement will support further development of cohesion regions in Poland and contribute to the deepening of the EU's Capital Markets Union.
"This is the EIB Group's first fully green securitisation in Poland under InvestEU. The European Commission's guarantees support such innovative financial instruments to advance green investment not just by corporates but also by individuals," said Katarzyna Smyk, Head of the European Commission Representation in Poland. "We also value cooperation between EU countries under this project."
Inbank's new offer will primarily focus on the acquisition of solar panels and heat pumps for private households in Poland. Such projects reduce CO2 emissions, improve air quality for health benefits, support climate change mitigation and contribute to the targets of REPowerEU, an EU programme aimed at increasing strategic autonomy of the bloc by diversifying energy supply and accelerating the green transition.
"This significant risk transfer securitisation transaction is a vital step in Inbank's long-term growth strategy, enabling us to scale our operations in strategic segments with a strong focus on green financing. It not only strengthens our capital position but also empowers us to offer more competitive terms to our customers, further strengthening our market position. Our partnership with the EIB Group reinforces our commitment to sustainability while driving growth and innovation. We at Inbank are proud to lead EIBG's first entirely green securitisation in Poland with InvestEU support, accelerating the transition to renewable energy solutions both in Poland and beyond, said Inbank's Management Board Chairman Priit Põldoja.
A securitisation is a capital relief instrument whereby part of the credit risk associated with loan portfolio is transferred to the protection seller, hence allowing the protection buyer to lend more. A synthetic securitisation is one where the protection buyer keeps the portfolio on its balance sheet.
Background information
The EIB is a institution of the European Union providing long-term financing for sound projects that pursue the bloc's shared priorities. The EIB's shareholders are the 27 member states. Its involvement increases economic competitiveness, spurs innovation, promotes sustainable development, enhances social and territorial cohesion, and supports a swift and fair transition to climate neutrality. The EIF is part of the EIB Group. It supports Europe's SMEs by improving their access to finance through a wide range of selected financial intermediaries, such as banks, guarantee and leasing companies, micro-credit providers and private equity funds.
In 2023, the EIB Group granted a total of 88 billion in new financing to more than 900 projects, of which 49 billion was earmarked for green investments. These funds are expected to support total investment of 320 billion, help 400 000 companies and sustain 5.4 million jobs. In Poland, more than half of the 5.1 billion granted by the EIB Group in 2023 went to climate-friendly projects.
The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery and growth. It helps mobilise private investments for the European Union's policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments, making funding for investment projects in Europe simpler, more efficient and flexible. InvestEU is underpinned by an EU budget guarantee of 26.2 billion and meant to mobilise at least 372 billion in additional investment.
Inbank is a financial technology company with an EU banking license that connects merchants, consumers and financial institutions on its next generation embedded finance platform. Partnering with 6,200 merchants, Inbank has 881,000+ active contracts and collects deposits across 7 markets in Europe. Inbank bonds are listed on the Nasdaq Tallinn Stock Exchange.
