Finance crunch delaying wind projects

Offshore wind power projects in northern Europe, key to reducing carbon dioxide emissions, face delays because of a shortage of bank finance.

“Things are being delayed,” Maartje van den Berg, a clean-technology analyst at Rabobank International, said in an interview Oct. 22. “We are involved in several projects that were close to financial close and they’ve just stopped. The banks are sitting and waiting for things to improve.”


European Union governments are promoting wind turbines to help meet a target to get 20 percent of energy supplies from renewable sources by 2020, designed to combat climate change. Project sizes are increasing, creating demand for debt. The limited availability of credit is pushing investment to less-risky onshore projects, van den Berg said.

Wind parks in the sea off the coast of Germany may each cost more than 1 billion euros ($1.3 billion) to build, according to van den Berg. Last year, banks would offer as much as 200 million euros of debt each. Now, “the syndication market is dead,” and each lender is offering a maximum of about 100 million euros, meaning more are needed to secure the funding.

Bloomberg