A milestone for Cologne’s heating transition

As Germany’s largest waterway, the Rhine carries not only a vast volume of water past Cologne, but also a great deal of thermal energy. From 2028, the energy supplier RheinEnergie plans to utilise some of this – and supply 50,000 households with heat.

A first for an experienced team

When Martin Steinebach goes for his run, he passes the large construction site where the three 50-megawatt modules for the heat pump are being built.

“Over the past six years, we have structured the financing for around 20 similar large-scale projects: From waste wood-fired combined heat and power plants to offshore wind farms. But a river water heat pump hasn’t been among them yet,” says the project financier.

A familiar principle, new dimensions

The heat pump in Cologne-Niehl is a flagship project. Yet the way it works is no different from the systems found in modern detached houses. The only difference is that the pump in Cologne does not extract heat from the air or the ground, but from the River Rhine. Using a refrigerant and electrically powered compressors, it raises this heat to over 100 degrees Celsius and feeds it into Cologne’s district heating network. The video shows exactly how this works.

Warm homes without fossil fuels

By utilising Rheinwärme, the river water heat pump reduces carbon dioxide emissions significantly. It generates two to three units of heat from one unit of electricity. According to RheinEnergie, compared with fossil-fuelled generation, it reduces greenhouse gas emissions by at least 100,000 tonnes per year.

A special project, special financing

A project of this scale requires long-term financing to cover the total investment of 280 million euros. Helaba arranged the financing in its capacity as structurer, lead arranger and lender – together with NRW.BANK and Sparkasse KölnBonn.

Like Martin Steinebach, Silke Grundmann also played a crucial role in the project: She is the account manager responsible and oversees Helaba’s entire business relationship with Stadtwerke Köln and its subsidiary RheinEnergie.

“What stood out for me was just how perfectly the financing worked. We have been working in a spirit of trust with the two partner banks for years, so their involvement in the overall financing made perfect sense.”

Sustainability-linked refinancing

The German federal government and the EU are funding the construction of the river-water heat pump in Cologne-Niehl. As a lender, Helaba is providing an asset-backed corporate loan. The financing is structured to be 100 per cent sustainable and contributes to Sustainable Development Goal (SDG) No. 7, ‘Affordable and clean energy’. Thanks to this clear earmarking, the consortium benefits from special terms for refinancing: the participating banks can access interest-subsidised funds from development banks – such as the Kreditanstalt für Wiederaufbau (KfW) or funds from NRW.BANK.

The principle

The principle behind the system can be explained – in somewhat simplified terms – in just a few steps.

A module from the inside

The module generates heat using a refrigerant that circulates in a closed loop.

Evaporator

Even the slight warmth of the Rhine’s water in winter is enough to heat the refrigerant until it evaporates.

Compressor

The gaseous refrigerant is compressed. As a result, its temperature rises significantly.

Condenser

The hot gas transfers its heat to the water in the district heating network via a heat exchanger. In the process, it reaches temperatures of up to 110°C. At the same time, the refrigerant cools down and returns to a liquid state.

Valve

The valve reduces the pressure, allowing the refrigerant to cool further. It is then ready to absorb heat again.

The cycle

The cycle is complete: the water flows back into the Rhine, slightly cooled

The facility

The heated water flows through the pipes into the district heating network.

Onto the net

And spreads out from Cologne-Niehl towards the city centre.

Heat for Cologne

From 2028, the City of Cologne will supply thousands of homes with heat from the Rhine via this field.

Up to

50,000

Households will be able to receive district heating from the plant from 2028.

100,000t

At least this amount of greenhouse gas emissions is avoided each year (figure provided by RheinEnergie, compared with generating the same amount of energy from fossil fuels)

3×50MW

The three modules of the river water heat pump generate power

A model for the future

For Silke Grundmann, the project serves as a model for future initiatives: “In Cologne-Niehl, we have created a blueprint for further syndicated financing arrangements, in which we can once again act as structurer and lead arranger. Other municipal utilities and energy suppliers are already planning to build a river water heat pump.”

She and Martin Steinebach continue to follow the project with keen interest, whether whilst out for a run or in discussions with the project partners.

The financing is clear and well-structured, and we have found the collaboration at all levels to be extremely solution-oriented and pragmatic.

Wolfgang Paul

Head of Finance at RheinEnergie

Frequently Asked Questions

A river water heat pump uses the heat from river water to generate district heating. A refrigerant absorbs the heat from the water, a compressor raises the temperature to over 100 degrees Celsius, and the district heating network absorbs this heat. As a result, the river water cools by two to four degrees and flows back into the river.

The site at Niehler Hafen is suitable for the heat pump for two reasons: it has a high-voltage connection to the Amprion electricity grid and is already connected to RheinEnergie’s largest district heating sub-network in Cologne city centre.

Large-scale heat pumps require greater amounts of electrical energy (auxiliary power) to raise the ambient heat to the high temperatures of the district heating network (often 80–90 degrees Celsius or more). A river generally stores heat more consistently than other media, which is why less electricity is required.

Under the Heat Planning Act, German cities are required to draw up heat plans. By 2030, at least 30 per cent of district heating networks must be powered by renewable energy or waste heat, rising to 80 per cent by 2040. As major cities are often situated on rivers, river-water heat pumps are an obvious and scalable solution for replacing large fossil-fuel power stations.

Similar projects have been running in Sweden since the 1980s. Switzerland is also using the technology. In Germany, plants have been in operation in Mannheim (Neckar) since 2023 and in Gießen (Lahn) since the summer of 2026.

Helaba, together with NRW.BANK and Sparkasse KölnBonn, has structured a syndicated loan of 150 million euros. Helaba is the structurer, lead arranger and lender. RheinEnergie is investing a total of 280 million euros in the project.

RheinEnergie has received an investment grant and a subsidy towards electricity procurement costs under the EU-approved programme ‘Federal Funding for Efficient Heating Networks’. It also benefits from a subsidised refinancing rate under the NRW.Bank infrastructure programme. Helaba managed the integration of the NRW.Bank funds. The project also makes a significant contribution to UN Sustainable Development Goal (SDG) 7 – affordable and clean energy – and to SDG 13 – climate action. The underlying economic activities meet the technical assessment criteria of the EU Taxonomy for the ‘Heating and cooling from renewable energy sources’ sector, including the ‘Do No Significant Harm’ (DNSH) criteria.

Depending on the project, this may take the form of a corporate loan for capital expenditure, a structured loan to a special-purpose vehicle, or project finance. Which option is most suitable depends, amongst other things, on creditworthiness, the partner structure and accounting policy.