Invest-NL begins developing a guarantee product for corporate Power Purchase Agreements

Invest-NL begins with support from the Ministerie van Economische Zaken en Klimaat in developing a guarantee product for corporate Power Purchase Agreements (cPPAs). The guarantee makes it easier for producers and consumers of renewable energy (for example, from wind or solar) to enter into long-term offtake agreements. The ambition is to have the outline of the product ready by early 2027.

With this initiative, Invest-NL takes a further step in its role as a broad National Promotional Institution. In addition to investing, Invest-NL is now also developing its own financial products to mobilise capital for the energy transition.

Breaking the financing bottleneck

The financing of sustainable energy projects is under pressure. Many companies, especially SMEs and industry, are not sufficiently creditworthy to conclude long-term contracts. For project financiers, this credit risk is unacceptable, meaning projects such as offshore wind or solar parks cannot include these contracts in their financing. As a result, new projects struggle to get off the ground.

The guarantee product can provide a solution by covering part of the credit risk. If an end user cannot fulfil their obligations, this is covered by the guarantee and the producer is partly insured against income loss.

Large impact with limited capital

Earlier research by Invest-NL showed that every euro invested under the guarantee enables approximately €60 in project financing. This means the fund can unlock around €3.6 billion in investments in sustainable energy and guarantee around 3.6 TWh of power contracts annually. This is comparable to about 10% of the industrial electricity consumption in the Netherlands.

Het ministerie van Economische Zaken en Klimaat and Invest-NL each allocated €1 million for the design and implementation of the guarantee product. In the coming months, the product will be further structured and developed.

New step in broadening activities

The development of this guarantee product marks an important milestone for Invest-NL. It demonstrates that Invest-NL not only invests but also develops innovative financial products that mobilise capital and increase the financing possibilities of the energy transition.