The European Investment Bank and BNP Paribas have agreed a €700 million guarantee programme designed to expand financing for European companies producing equipment for electricity grids.

The agreement targets a growing bottleneck in Europe’s energy system: manufacturers of transformers, cables, switchgear and other components are being asked to increase production while utilities and governments accelerate investment in transmission and distribution networks.

Under the deal, the EIB will provide up to €350 million in counter-guarantees, while BNP Paribas will commit an equivalent amount. The resulting €700 million portfolio of bank guarantees is expected to support companies investing in additional production capacity and supply contracts.

The European Investment Bank said the arrangement could stimulate as much as €2.8 billion in investment in the real economy.

The initiative is backed by the EU’s InvestEU programme and forms part of the EIB’s €1.5 billion Pan-EU Power Grid package. Guarantees are particularly important for infrastructure suppliers because large electricity projects often require manufacturers to provide financial guarantees before receiving contracts.

Those commitments can consume bank credit lines that companies might otherwise use to build factories, purchase machinery or finance working capital.

By sharing the risk with BNP Paribas, the EIB intends to increase the volume of guarantees available without requiring manufacturers to commit equivalent amounts of their own financing capacity.

The programme arrives as grid investment becomes one of the central constraints on European energy policy.

The EU is simultaneously attempting to expand renewable generation, electrify transport and industry, increase cross-border electricity trading and reduce dependence on imported fossil fuels.

All require additional transmission and distribution capacity. EU Today reported earlier this year that the EIB had approved almost €2 billion for clean energy and grid projects as part of a broader €10 billion financing package.

The latest BNP Paribas agreement concentrates specifically on the industrial supply chain needed to build those networks.

Grid investment is increasingly influenced by security concerns as well as electricity demand.

EU Today reported last week that Lithuania is designing part of the Harmony Link infrastructure to withstand drones, sabotage and vehicle attacks near the Russian exclave of Kaliningrad. Such requirements increase the cost and complexity of new electricity infrastructure while demand for conventional grid equipment is already rising.

European manufacturers face lengthy order books for some high-voltage equipment, particularly large transformers and specialised cables. Supply constraints can delay renewable projects and interconnectors even when planning permission and financing are available.

The EIB says its guarantee programme is intended to give manufacturers greater financial capacity to respond. The arrangement follows a similar partnership between the bank and BNP Paribas covering wind-energy manufacturing.

In February 2025, the two institutions agreed a €1 billion guarantee portfolio intended to support investment in the European wind industry. The EIB has subsequently expanded its focus from generation equipment to the networks required to transport electricity.

In 2025, the EIB Group invested €33 billion in energy projects worldwide, including €11.6 billion in grids and storage, according to the institution.

European energy policy has increasingly recognised that adding generating capacity without expanding grids can create congestion, delays and periods in which renewable electricity cannot reach consumers.

Political disagreements remain over how new infrastructure should be planned and financed.

In June, EU Today reported that member states had pushed back against stronger Brussels control over cross-border grid planning, preferring to preserve a significant role for national authorities.

Financing institutions are meanwhile moving ahead with programmes intended to expand the underlying industrial capacity.

For manufacturers, the EIB–BNP Paribas scheme does not provide €2.8 billion of direct public spending. Instead, public guarantees are being used to increase the volume of private financing available, with the EIB assuming part of the risk.

The distinction is central to InvestEU, which uses EU budget guarantees and EIB financing to attract additional private capital.

Europe’s electricity transition is increasingly dependent on this less visible part of the energy system. New wind farms, solar installations, nuclear reactors and industrial electrification projects ultimately require the same infrastructure: sufficient cables, substations, transformers and transmission capacity to move electricity from producers to users.

European Commission President Ursula von der Leyen and NATO Secretary General Mark Rutte Photographer: Dati Bendo © European Union
European Commission President Ursula von der Leyen said on Wednesday (2 September) that Europe and NATO would increase pressure on Russia after Germany attributed an attempted attack on cargo planes at Leipzig/Halle Airport to Moscow, calling the incident a “new escalation” on European Union soil, writes Catherine Feore.

“This was an attack using military-grade material, carried out by Russian operatives on European Union soil. We will not tolerate it,” von der Leyen said alongside NATO Secretary General Mark Rutte in Brussels.

The German government said on Tuesday (1 September) that its investigation and intelligence findings established Russian responsibility for the attempted attack at Leipzig/Halle Airport last month. Russia has denied responsibility.

The meeting took place as foreign ministers and the EU's High Representative for Common Foreign and Security Policy were meeting to discuss Russia and Ukraine among other issues.

“Had this attack succeeded, this would have resulted in enormous damage and possibly even loss of life,” von der Leyen said. “We stand in full solidarity with Germany.”

“If the intention was to make us think twice about supporting Ukraine, I can tell you it has only strengthened my resolve. Intimidation will not work.”

Von der Leyen said the Leipzig incident was part of a wider pattern of Russian activity confronting Europe, including airspace incursions, drones disrupting airports and interference with critical infrastructure.

“Leipzig marks a new escalation on European Union soil, directly attributed to Russia,” she said. 

Von der Leyen outlined three areas for a stepped-up European response: stronger protection of European infrastructure backed by additional sanctions on Russia, increased air-defence support for Ukraine, and an acceleration of Europe’s own defence build-up in close cooperation with NATO.

Infrastructure and sanctions

First, von der Leyen said Europe must strengthen the protection of infrastructure that could be targeted by Russian hybrid operations and be prepared to respond more quickly when attacks occur.

“We must treat our everyday infrastructure as frontline targets, and protect them accordingly,” she said.

The EU already has rapid response teams that can assist member states faced with such attacks, she said, arguing that Europe’s ability to prepare and respond would itself act as a deterrent.

Von der Leyen also said the EU was ready to intensify economic pressure on Moscow through sanctions. “Our sanctions have weakened Russia’s economy. We can use more sanctions and have them ready to impose as soon as such dangerous, life-threatening acts are attributed,” she said. “Every loophole Russia exploits is one we must close.”

European foreign ministers were discussing new listings in Ireland on Wednesday, she said, while the Commission was examining further ways to “cut deeper into Russia’s war chest”.

More air defence for Ukraine

Von der Leyen said her second priority was strengthening support for Ukraine, announcing that the EU had received a new request worth several billion euros for air-defence capabilities.

“Today, I can confirm that we have received a new payment request,” she said. “It is worth several billion euro, and would cover Ukraine’s air defenses, including the highly advanced PAC-3 Patriot air defense systems.”

Member states were considering the request, she said.

“I can say that it’s going in the right direction.”

Von der Leyen also pointed to European work with Ukraine on the FRIO project to develop anti-ballistic missile defences, as well as the EU’s €90 billion support loan.

“Since June, we have issued €8.5 billion for drones and missiles for Ukraine from this loan,” she said, adding that the funding could also be used to buy fighter aircraft from European industry.

Faster European defence build-up

Von der Leyen’s third priority was to accelerate Europe’s defence build-up alongside NATO, with air defence at the centre of the effort.

“Air defenses are critical,” she said. “We need a faster, more integrated alert system across Europe, and then we must intercept the threats faster.”

She pointed to the EU’s €800 billion defence investment plan, including €150 billion through the SAFE instrument, as a way for European countries to increase defence investment jointly.

“We are in a new era of European security,” von der Leyen said. “European investment in defense strengthens NATO and re-energizes our industrial base.”

Rutte backed von der Leyen’s assessment of the threat, saying Russia had become “increasingly reckless” as its war against Ukraine continued.

“We have seen more drones and missiles crossing into our airspace along our eastern flank, creating increased risk,” Rutte said.

“And we have also seen an increase in malign activities targeting our territory directly, whether it is fires set in factories producing defense equipment for Ukraine, or indeed the Russian hybrid attack in Leipzig.”

“The examples are many. The dangers Russia poses are clear,” he added.

Rutte said NATO was working “around the clock” to ensure it could protect its population and said Moscow would fail if it hoped attacks such as Leipzig would undermine Western backing for Kyiv.

“If Russia thinks we will be divided by the threat, or if they think we will be deterred from supporting Ukraine, they are mistaken,” he said. “Our unity is unshaken. Our support to Ukraine is clear.”

Rutte said NATO allies had agreed to provide at least €70 billion to support Ukraine this year and the same amount next year, with the EU loan forming a “crucial element” of that support.

The NATO chief also backed the push for additional air defence and increased defence production, saying higher spending had to translate into additional military capabilities and greater industrial capacity.

Von der Leyen said the EU and NATO would not be intimidated into reducing their support for Ukraine. “Europe and NATO will not just maintain our pressure on Russia; we will increase it,” she said. “We will not stop — not until Russia stops bombing and killing innocent children, men and women in Ukraine. We will continue, we will prevail, and we will deter anyone who attacks our freedom and our security.”

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