The Export and Investment Fund of Denmark (EIFO) is providing a €475m guarantee to finance the development of high-voltage cables across Germany, marking the fund’s largest transmission line investment to date.
EIFO’s guarantee covers 95% of a €500m loan for the SuedLink project, which has been provided to German utility group EnBW by a consortium of international banks comprising Crédit Agricole CIB, HSBC and ING.
The loan will fund 450km of underground cables for the SuedLink project, adding 4GW of capacity to transport wind power from northern Germany to the industrial hubs of Bavaria and Baden-Württemberg.
EnBW’s grid subsidiary, TransnetBW, is building the SuedLink project alongside other operators. Danish manufacturer NKT is supplying and installing the high-voltage cables, with EIFO’s €475m guarantee specifically covering NKT’s work.
The deal lifts EIFO’s total German exposure to €2.88bn, building on previous commitments that include a €1bn North Sea offshore wind facility for RWE and a €100m critical raw materials loan for Vulcan Energy.
Peter Boeskov, chief commercial officer of EIFO, said: “This transmission line is critical to both Germany and Europe. Expanding grid capacity strengthens European energy autonomy and supports the transition to an electrified continent. With cables from Danish NKT at the core, this is a natural fit for EIFO.
“We have financed more than 240 wind projects globally, and our ambition now is to become a key financing partner in the expansion of Europe’s power grid. This agreement shows how we can help drive that development.”
Michael C Hjorth, chief commercial officer at NKT, said: “We are seeing an increasing focus on electrification across Europe as a key driver of energy independence through greater use of domestically produced energy. This calls for continued investment in an integrated power grid, where large underground cable connections can connect energy markets.
“This development is reflected in projects such as the Bornholm Energy Island and the German corridor projects, including TransnetBW’s SuedLink project, which is currently under installation. EIFO’s support supports the expansion of critical energy infrastructure in Europe, contributing to a stable and secure energy supply across the continent.”
Marcel Münch, SVP of finance, M&A and investor relations at EnBW, said: “The €500m loan represents another key element in EnBW’s long-term financing strategy.
“In light of the continued high investment needs in grid infrastructure to enable the energy transition, this step allows us to further diversify our financing portfolio and secure attractive long-term conditions.”
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