The European Bank for Reconstruction and Development (EBRD) has committed to fostering the growth of solar energy in Estonia by providing a €22 million loan to KC Solar2 OÜ. This funding will finance the construction of a 45 MW solar park in Kehra, supported by first-loss risk cover from the European Union (EU) under the InvestEU programme.
Aligning with EU Renewable Energy Goals
Estonia aims to ensure that 65% of its final energy consumption comes from renewable sources by 2030, with a target of 100% of its electricity generated from renewables by the same year. The development of Estonia's solar energy potential is crucial in achieving these goals and enhancing the country's energy security.
Impact of the Pihlaka Solar Farm
Upon completion, the Pihlaka solar farm is expected to produce 41,230 MWh annually, contributing significantly to the greening of Estonia's electricity grid. The generated power will be sold on the open market, boosting the competitiveness of Estonia’s energy sector.
Tomas Kairys, EBRD Head of the Baltic States, emphasized the project's significance: “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 in Estonia for other developers and financiers, with the potential to unlock much more investment in the renewables space in the region.”
About KC Solar2 OÜ
KC Solar2 OÜ is a special purpose vehicle incorporated in Estonia specifically for developing, constructing, and operating solar photovoltaic power plants. The EBRD loan will fund the 45 MW Phase 2 of the project, part of a broader initiative that includes two solar power plants with a combined capacity of 52.5 MW. KC Solar2 OÜ is fully owned by KC Energy OÜ, an Estonian renewable energy developer with nearly 83 MW of operational solar farms and over 500 MW of solar and wind projects in the pipeline.
EBRD's Investment in Estonia
The EBRD is a leading institutional investor in Estonia, having invested €974 million in 112 projects to date. Supporting the green economy transition through investments in energy efficiency and renewable energy remains a key priority for the EBRD.
The Pihlaka solar farm project exemplifies the EBRD and EU's commitment to advancing renewable energy infrastructure, ensuring a sustainable and secure energy future for Estonia.
For more information on the EBRD’s initiatives and investments, visit EBRD’s official website.
