Enpal, a Berlin-based renewable energy technology firm, is issuing Europe's first public combined heat pump and solar panel asset-backed securitization (ABS), as ABS emerges as a means of funding energy-efficient consumer heating systems.
Sponsors are expected to price the deal around December 5, which will issue notes supported by a €303 million ($351.1 million) provisional portfolio as of October 31. Solar receivables account for three quarters (74.2%) of the portfolio, with the remainder being heat pump receivables.
Enpal tees up the deal as European heat pump vendors are looking to meet the European Union's (EU) challenge of reducing reliance on foreign gas imports and reaching the Paris Agreement's climate goals. The EU's Green energy policy aims to install around 60 million installed heat pumps by 2030, up from 26 million in March 2025. If current trends continue, however, the region will not reach its goal, KBRA says in its "Heating up European ABS: Heat Pump Finance and Securitisation" report.
Lack of consumer financing has been a major obstacle to market expansion, with existing financing methods such as bank loans insufficient to expand the market as fast as the EU would like. A survey by German state-owned development bank KFW found that 41% of German households can't afford to implement a renewable energy installation, although they would like to do so.
ABS presents a solution
To promote securitizations, last year the European Investment Bank (EIB) and the European Investment Fund (EIF) participated in the first public ABS collateralized by residential residential solar energy revenue.
Enpal sponsored that deal, too, raising €240 million. The EIB acted as anchor investor with €50 million, while the EIF guaranteed €50 million of Class A notes.
The issued notes, labelled Golden Ray 1, were green bonds, as defined by the International Capital Market Association, and rated by KBRA and Moody's Ratings.
While EIB support facilitated the issue, it wasn't needed as the tranches were oversubscribed up to six times, Gregor Burkart, head of Enpal's Refinancing Division, said in a statement. Citi was sole arranger and structurer on the deal, and Barclays, Bank of America, and Crédit Agricole CIB joined as joint lead managers.
"Enpal is a pioneer of this asset class, demonstrating how securitization can effectively channel private capital into the energy transition," according to a statement from Gregor Burkart, head of Enpal's refinancing division.
So far, these have been the only renewable energy public ABS issuances in Europe, according to Dietmar Helms and Sebastian Oebels, respectively a partner and a counsel at European law firm Hogan Lovell.
All other renewable energy securitizations involve warehouse deals, they said.
KBRA says Europe's economic outlook is favorable to ABS issuance overall. Following a subdued 2025, it expects GDP growth across Europe and the U.K. to stabilize in 2026. It forecasts robust European household credit fundamentals in the year ahead, underpinned by solid labour markets, rising real incomes, and sustained savings buffers.
Slow growth
In the next 12 to 24 months, Walsh expects to see more transactions featuring heat-pump collateral, often in combination with solar or other energy-efficiency assets.
Yet growth in the sector is not without its potential challenges, including limited historic data on defaults and prepayments for consumer loans. Additional new issuance should bolster performance data, expanding credit modeling and investor assessment, KBRA's Dublin-based managing director Killian Walsh told ASR in an interview.
Additional reporting contributed by Simine Arnfield.
