It’s full steam ahead with ABN AMRO’s ambitious renewable energy target

A newly planned battery farm in the Dutch city of Dordrecht will soon boast enough storage capacity to provide 21,500 households with electricity. The battery energy storage system’s (BESS) massive batteries will help balance supply and demand in the energy market better and so encourage the use of renewable electricity. It’s one of many renewable energy projects financed by ABN AMRO to drive the energy transition.

ABN AMRO is determined to help move the energy transition forward as part of its climate strategy. To that end, the bank aims to invest at least € 10 billion in renewable energy by 2030 – a challenge its New Energies teams have embraced, say Arthur van Dijk, ABN AMRO’s Head of New Energies, and Ralph van Kaam, Team Lead of Sustainable Energy & Recycling at ABN AMRO.

ABN AMRO’s renewable energy targets are ambitious. How does the bank plan to meet them?

Ralph: “We have two commercial teams with a focus on renewables and other low-carbon technologies. They help both small and large companies secure the financing they need. Beyond financing businesses looking to become more sustainable, we also offer strategic guidance, sharing our knowledge about creating sustainable business processes.”

Arthur: “We know the sustainability challenges facing business owners across various sectors – both on the financial and on the operational side.”

Ralph: “Thanks to our sector knowledge, ranging from hydrogen to battery technology and biomass energy, we’re in a position to finance producers of membrane technologies and other tools to convert organic residues into liquefied natural gas. Obviously, we need to be able to evaluate which technologies are viable when putting together financing packages. That’s why our teams have attended specialist courses like the masterclass in energy technologies at the HAN University of Applied Sciences in Arnhem and Nijmegen. We then share with our clients the knowledge we’ve built up in these sectors in recent years.”

Arthur: “Our clients expect us to be conversant with the technologies in the market. It helps that our teams have wide-ranging knowledge. Our New Energies teams have developed deep sector knowledge in areas like hydrogen technology, BESS and carbon capture, utilisation and storage (CCUS).”

Do the bank’s prior objectives help you meet your current goals?

Arthur: “Three years ago, we set a target to increase our lending for renewables and other decarbonisation technologies to at least € 4 billion by 2025. We exceeded that target at the end of 2023, which allowed us to raise our goal to € 10 billion by 2030. As a result, we’ve gained experience in a wide range of projects and technologies. The multiple solar and wind farms across Europe financed by the bank are just one example.”

Ralph: “We also have experience with clients active in energy storage, including battery technology and heating and cooling networks. Others focus on charging infrastructure, and we’re seeing a lot of activity around geothermal and aquathermal energy, where thermal energy is obtained from the earth and from water.”

Tailored financing makes these projects possible. How does it differ from more conventional financing?

Arthur: “A key element is the performance criteria we agree with each individual company as part of the financing package. If the client meets these agreed measurable sustainability targets, we give them a reduced interest rate, for instance.”

For many companies, sustainability is uncharted territory. How does the bank help them?

Ralph: “We tailor financing to reflect business and market developments. A good example is battery storage. Traditionally, this relies on long-term agreements with energy suppliers, which determine how financeable the battery is. We’re increasingly seeing battery capacity also being used for trading on the balancing market. This can potentially yield higher returns for the battery owner, but also greater risk for the bank. Thanks to our specialists’ market insights, we can accurately assess and factor in these risks where necessary.”

Arthur: “If a company meets the agreed targets, it earns a reward. But if it falls short, we don’t walk away. In fact, that’s when it’s most important to stay at the table.”

The world is changing fast. How do geopolitical developments affect sustainability goals?

Ralph: “We’re monitoring the pace of the energy transition, particularly in light of developments in the US and beyond. Despite these uncertainties, the business case for renewable energy remains attractive to many companies. It’s important to remember that plenty of renewable energy technologies are now scalable and can compete well on price with fossil fuels.”

Arthur: “ABN AMRO will continue to push the sustainable transition. And not just through financing. We also feel a responsibility to share our knowledge of attractive business cases.”

Ralph: “We showcased this expertise at the recent Decarbonisation Summit, for example, where we provided updates to business owners on the battery storage market and other areas. Ultimately, we believe that promoting sustainability also means sharing experiences and bringing our network partners together.”