In September, the lending arm of the EU provided a €200 million loan to listed logistics developer and owner CTP as part of the expansion of its efforts to finance businesses seeking to transition to clean energy.
The European Investment Bank issued the 10-year unsecured loan to CTP, headquartered in Amsterdam, to support a roll-out of solar panel installation across its 118 million square foot European industrial and logistic park portfolio.
For CTP, the EIB financing package represents a vote of confidence in its efforts to improve the sustainability of its vast logistics portfolio at a time when real estate owners face the need to address energy efficiency across their portfolios.
Peter Čerešník, chief operating officer at CTP, told Real Estate Capital Europe: “The backing of the EIB is testament to the robust business strategy we have in place to deliver on the large-scale installation of solar PV [photovoltaic systems] across our portfolio and allows us to obtain long-term unsecured financing at attractive conditions.
“The facility provides us with a fantastic opportunity for the next two-to-three years because it will cover around 70 percent of our solar-project construction investment.”
CTP has been installing photovoltaic systems on its industrial and logistics parks for more than three years, owing to increasing numbers of tenants requesting them due to improved energy security and the lower energy bills they provide.
At year-end 2022, the company reported it had installed 38-megawatt peak of photovoltaic capacity on its roofs and is targeting an additional 100MWp annually from 2023 onwards – a 15 percent yield-on-cost return on these investments.
Mwp is a unit measurement describing the maximum power outage of a photovoltaic system under the ideal environmental conditions.
The EIB provided the finance as part of its REPowerEU programme, a strategy set up in response to the Russian invasion of Ukraine, which aims to reduce the region’s dependence on fossil-fuel imports and accelerate the green transition.
The EIB is funding companies developing renewable energy sources, rolling out energy efficiency measures and upgrading electricity grids to improve efficiency and resilience.
The bank has said it will issue €45 billion of loans under REPowerEU by 2027 – a target that represents an increase from the original €30 billion of planned finance the EIB originally set out last October.
Čerešník believes sustainable financing is “the way forward” for real estate companies as increasing numbers of developers look to build commercial buildings capable of generating energy on-site.
In February this year, CTP installed a 1.5 megawatt photovoltaic power station at the CTPark Bucharest industrial park (pictured), comprising approximately 3,700 rooftop panels, which will provide an average annual production of 2,100 megawatt hours – with priority distribution to its tenants. Megawatt hours measure the amount of energy consumed or generated over a given time period.
Čerešník said CTP’s long-term aim was to be able sell all the energy generated by its parks to its occupiers. Currently, excess energy is being supplied back to the local electricity grid. “This strategy will make our tenant relationships stronger and last longer because it reduces their total occupancy costs,” he added.
“It’s not a question of if demand for solar and green energy will continue, it’s a question of how and to what extent. I cannot imagine going back to a time where there wasn’t this kind of demand,” Čerešník said.