Enel's solar panel subsidiary 3Sun has signed a €560 million bank package for its factory in Catania, Sicily. It is the second bank financing Leap records for the same factory in under a year. A government grant followed ten days later. Laid end to end, the three tell a story about who is really carrying the risk of making solar panels in Europe.
Key takeaways
- 3Sun, a subsidiary of Enel, secured a $608.68 million (€560 million) financing package on 24 January 2024 for the construction and operation of its TANGO solar panel gigafactory in Catania, Sicily.
- The 3Sun package comprises a $51.63 million EIB loan backed by InvestEU, a $160.3 million UniCredit loan plus a $92.39 million VAT loan, and loans of $152.1 million each from Banco BPM and BPER Banca, with the bank loans 80 percent guaranteed by a SACE Green guarantee.
- The EIB committed $128.26 million (€118 million) of intermediated funding to UniCredit for its 3Sun loan, enabling UniCredit to improve the financing conditions offered to 3Sun.
- Leap records an earlier $599.2 million UniCredit loan for the TANGO factory in February 2023, made up of a $508 million senior term loan and a $91 million VAT loan and partially counter-guaranteed by SACE.
- Enel secured a further $97.56 million from the Government of Italy for the TANGO factory expansion, announced on 3 February 2024, with the aim of raising capacity from about 200 MW a year to 3 GW by the end of 2024.
How did 3Sun get here?
Through a long detour. 3Sun was set up in 2010 by Enel Green Power, Sharp and STMicroelectronics to make modules based on amorphous silicon, a thin-film technology. Enel took full ownership in 2015. By the time of this financing the Catania plant, in an area known as Etna Valley for its electronics and semiconductor firms, could make around 200 MW of panels a year.
The plan is to multiply that by fifteen. TANGO is meant to reach 3 GW of annual output and become the largest solar factory in Europe, producing bifacial modules, which capture sunlight on both faces. The factory runs continuously, 24 hours a day, and is described in the record as the most automated photovoltaic panel plant in the world.
Timeline: what did each round pay for?
The record gives three steps, a year apart at the ends.
February 2023. UniCredit lends $599.2 million, split between a $508 million senior term loan and a $91 million VAT loan. A VAT loan bridges the value added tax a company pays on construction spending until it is refunded, so it is short-term by nature. SACE, Italy's export credit agency, partially counter-guarantees the loan through its Green Guarantee. At that point the plan is to start with the first 400 MW in September 2023 and be fully operational at 3 GW by July 2024.
January 2024. The €560 million package arrives with five lenders rather than one. The bank loans carry an 80 percent SACE guarantee. The deadline in the record has moved to the end of 2024.
February 2024. The Government of Italy adds $97.56 million for the factory expansion.
Leap records the two bank financings as separate transactions. Both are for the same factory, both involve UniCredit and SACE, and both include a VAT loan of similar size. The record does not say whether the 2024 package replaces part of the 2023 loan or sits on top of it, so the two should not simply be added together.
Who is really lending to 3Sun?
Mostly public institutions, directly or through guarantees. Three layers of public support sit around the commercial banks.
The first is the European Investment Bank, the EU's lending arm. It lends $51.63 million directly, backed by InvestEU, the EU programme that guarantees EIB lending to priority sectors. It also passes $128.26 million to UniCredit as intermediated funding. That is money the EIB lends to the bank so the bank can relend it on cheaper terms. Taken together, about $179.89 million of the package, close to 30 percent, is EIB money.
The second is SACE. An 80 percent guarantee on the UniCredit, Banco BPM and BPER loans, which total $464.5 million, means the state agency carries the default risk on about $371.6 million of them. The banks lend, but most of the loss would fall elsewhere.
The third is the grant, which is not a loan at all.
The reason for the support is spelled out in the record. TANGO is aligned with REPowerEU, the EU plan to cut reliance on imported fossil fuels, and with the EU target of producing nearly 600 GW of solar energy by 2030 while diversifying away from Chinese solar components. The financing is industrial policy delivered through bank loans.
Enerdatics' data shows how thin this market is. A Leap search of European solar financings since the start of 2022 that mention a factory returns four records. Three are 3Sun's TANGO: the $599.2 million loan of February 2023, the $608.68 million package of January 2024 and the $97.56 million grant of February 2024. The fourth is NorSun's $8.5 million equity raise in Norway in August 2023. On those records, one factory accounts for nearly all of the disclosed money behind European solar manufacturing in the period.
What does the deal signal for European solar manufacturing?
It signals that, at gigawatt scale, European panel making is being financed by states rather than by markets. The banks named on the 2024 package carry a fraction of the risk their headline participation suggests. Their exposure is cushioned by an export credit guarantee, part of their funding comes from the EIB, and the sponsor is one of Europe's largest utilities.
The same pattern appears elsewhere in European manufacturing. Germany backed Northvolt's battery plant in Heide with a direct grant on the ground that it would otherwise have gone to the United States, as covered in Enerdatics' analysis of the Northvolt Heide award. The US route looks different. There, an established manufacturer could lean on a commercial bank syndicate, as First Solar's $1 billion revolving credit facility shows.
It also signals a timetable under pressure. A plant meant to be fully running by July 2024 in the first loan was meant to reach 3 GW by the end of 2024 in the second. A second bank round and a grant within twelve months suggest the cost of reaching full scale was still being assembled while the factory was being built.
Per unit of capacity, the January 2024 package alone works out at about $0.22 million for each MW of annual output added between 200 MW and 3 GW. That is not a cost of the factory, which the record does not give. It is a measure of how much bank debt one step of the expansion needed.
Frequently asked questions
How much did 3Sun raise for the TANGO factory in January 2024?3Sun secured a $608.68 million (€560 million) package from the EIB, UniCredit, Banco BPM and BPER Banca, with the bank loans 80 percent guaranteed by SACE.
What is the TANGO factory?TANGO is 3Sun's solar panel gigafactory in Catania, Sicily. It produces bifacial photovoltaic modules and is being expanded from about 200 MW to 3 GW of annual capacity.
Did Italy also fund the factory directly?Yes. Enel secured $97.56 million from the Government of Italy for the TANGO expansion, announced on 3 February 2024.
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