Luxembourg supports Finnish solar energy projects by EUR 40 million through EU mechanism
Luxembourg will fund solar power projects in Finland with EUR 40 million through a new EU renewable energy financing mechanism. The projects will be selected through competitive tendering carried out by the European Commission and the European Climate, Environment and Infrastructure Executive Agency (CINEA).
Luxembourg and Finland have signed the commitment to join the mechanism. Minister of Economic Affairs Mika Lintilä, Luxembourg’s Minister for Energy Claude Turmes and EU Commissioner for Energy Kadri Simson met in connection with the informal meeting of energy ministers in Stockholm on 27–28 February.
"The agreement between Finland and Luxembourg in this financing mechanism is the first of its kind. It will strengthen and diversify the production of renewable energy in Finland. Despite the dark winter, there is an opportunity to significantly increase solar electricity production in Finland", says Minister Mika Lintilä.
The funding mechanism (Commission Implementing Regulation (EU) 2020/1294 on the Union renewable energy financing mechanism) enables the Member States to implement joint projects through a channel managed by the Commission. Participating in the mechanism is voluntary for the Member States.
Under the mechanism, the “contributing Member State” (in this case, Luxembourg) will receive, in return for its funding, 80% of the production generated by the project as a statistical transfer for a period of 15 years. The “host Member State” (Finland) will permit the construction of the project funded by the mechanism in its territory and benefit from the investments and the energy generated. National legislation will apply to projects granted support in all respects.
Call for applications to begin in Finland in spring
The application period for funding will begin in the spring and Finland will provide information on its launch. The Ministry of Economic Affairs and Employment and the Commission will organise an information event for project developers in Helsinki in the spring, the exact date of which will be announced later.
The European Commission and the CINEA will be responsible for the competitive tendering of the projects. They will also be in charge of the call for applications and payment and deal with other practical matters directly with the project developers.
Projects with a capacity of 5-100 megawatts may participate in the call for tenders. The projects with the lowest price that meet the criteria detailed in the application documents will be successful in the competitive tendering.
Funding can be granted to multiple projects. Because funding would be available to several projects, new capacity would be built even if an individual project failed.
The maximum amount of aid granted to a project is EUR 180,000 per megawatt. If the actual price of projects remains below the maximum amount, financing available through the mechanism is no more than 400 MW.
Pekka Grönlund, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 064 815
Outi Vilén, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 016 (available from 3 March 2023)