EIB and LEG Sign Credit Facility to Finance Energy Modernisation in Housing Portfolio

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66866-s6The European Investment Bank (EIB) and LEG Immobilien AG have concluded a loan agreement for EUR 100 million. The loan from the EU bank, which is made possible by guarantees from the European Fund for Strategic Investments (EFSI), is to be used for the pro rata financing of energy-efficient modernisation measures in the property company’s housing portfolio. The EFSI is a mainstay of the Investment Plan for Europe (IPE), in which the EIB and the European Commission are strategic partners and under which financing provided by the EU bank strengthens the competitiveness of the European economy.

The loan agreement was signed in Düsseldorf on 16 December 2016 by Thomas Hegel, CEO of LEG Immobilien AG, by CFO Eckhard Schultz and by Dr Werner Hoyer, President of the European Investment Bank. The structure of the unsecured financing offers LEG maximum flexibility at very favourable conditions. The credit facility can be drawn down in several tranches and has a term of up to 13 years. In November 2016, LEG had announced an investment programme of around EUR 200 million.

EIB President Hoyer emphasises: “The European Investment Bank takes on a leading role in climate protection. For this reason, I expressly welcome the collaboration with LEG.  The funds we are providing with the assistance of the Investment Plan for Europe will be invested directly in the energy renovation of LEG residential buildings with several thousand apartments in North Rhine-Westphalia. Energy consumption in Germany can only be significantly reduced if we substantially increase energy efficiency in the building sector. This is a key factor for sustainable climate protection and a successful energy transition.”

“We are delighted that in the EIB we have found a renowned and reliable partner that is committed to achieving similar goals to our own. For example, the EIB aims to get involved in implementing sound investments that significantly improve the standard of living and quality of life for people in Europe. At LEG, we want to significantly increase liveability and well-being for our tenants with sustainable investments in our buildings,” says Eckhard Schultz.

The European Commission Vice President responsible for Jobs, Growth, Investment and Competitiveness, Jyrki Katainen, comments: “I am delighted that the EFSI is supporting improvements to residential units that will benefit many thousands of people. The agreement reached today shows the investment campaign’s potential to promote investments that facilitate the transition to a low-carbon economy and a real improvement in people’s everyday quality of life.”

The funds from the EU bank, which are secured with guarantees from the EFSI, will be included pro rata in the modernisation programme additionally launched by LEG. Based on an in-depth analysis of the LEG portfolio, potential for additional investments totalling around EUR 200 million has been identified for the next three years. With this extensive modernisation programme, LEG is continuing its growth-oriented business strategy.

Starting from mid-2017, investments will primarily be made in energy renovation of the building envelopes. Other planned measures include balcony installations, bathroom modernisation, loft extensions and additions, and conversion measures to make apartments suitable for senior citizens.

The regional focus of the modernisation programme is on attractive growth markets such as Dortmund and Münster and the Düsseldorf metropolitan area.

Source: eib.org