EBRD Loans €22M for 45 MW Solar Park in Estonia

The European Bank for Reconstruction and Development (EBRD) is bolstering Estonia’s solar energy capabilities with a €22 million loan to KC Solar2 OÜ. This funding will finance the construction of a 45 MW solar park in Kehra. The loan benefits from first-loss risk coverage by the European Union (EU) under the InvestEU programme.

Aligning with the EU’s renewable energy objectives, Estonia aims to ensure that 65% of its final energy consumption comes from renewable sources by 2030, and plans to have 100% of its electricity generated from renewables by the same year. The development of Estonia’s solar energy potential is essential to achieving these goals and enhancing the country’s energy security.

Once operational, the Pihlaka solar farm is expected to generate 41,230 MWh annually, contributing significantly to greening Estonia’s electricity grid and making it more competitive.

Tomas Kairys, EBRD Head of the Baltic States, remarked, “This is one of the first renewable energy projects in the Baltic countries to be structured on a fully merchant basis. It paves the way for a more competitive and liquid electricity market in Estonia and demonstrates the commercial viability of renewable projects for other developers and financiers, with the potential to unlock much more investment in the renewables sector in the region.”

KC Solar2 OÜ, a special purpose vehicle established in Estonia, is responsible for developing, constructing, and operating two solar photovoltaic power plants with a combined capacity of 52.5 MW. The EBRD’s loan will specifically finance the 45 MW Phase 2 of this project. KC Solar2 OÜ is entirely owned by KC Energy OÜ, an Estonian renewable energy developer that currently owns and operates nearly 83 MW of solar farms nationwide and has over 500 MW of solar and wind projects in the pipeline, along with storage solutions for managing renewable energy.

The EBRD is a leading institutional investor in Estonia, having invested €974 million in 112 projects across the country to date. Supporting Estonia’s transition to a green economy by investing in energy efficiency and renewable energy remains a key priority for the EBRD.