- European Investment Bank to authorise £700 million in matched loans for onshore wind developments.
- Three UK banks involved.
- Lending scheme designed to tackle lack of project finance.
- BWEA report shows extent of problem.
BWEA, the UKs leading renewable energy association, welcomed the EIB backed Government plan to inject much needed liquidity into the onshore wind development market. The measure announced in Aprils Budget and coming into force today is set to free-up a total of £1.4 billion, as the £700 million in EIB funds will be matched by a further £700 million from the three commercial banks involved. The funds are aimed specifically at wind farms with planning permission.
Maria McCaffery, BWEA Chief Executive, said: Wind energy has never been a risky investment. In fact, wind farms in the UK have never defaulted on their loans. However, the recent turbulence in the financial markets has affected availability of loan finance for smaller and medium sized projects. The funds announced today will be particularly important role in bringing forward a host of sound projects, by developers with a proven track record in wind energy delivery."
Research conducted by New Energy Finance on behalf of BWEA shows that while investment in wind energy on balance sheet has increased from £212 million in 2007 to £920 million in 2009, project finance in the same period has decreased from £336 million to £54 million. Statistics show that there is a strong pipeline of onshore projects with planning approvals in the UK, totalling 756MW in construction and 3056MW with consent.
There is no reason why the UKs wind energy sector should not be as successful as those of our European neighbours, particularly given our wind resources. The initiative launched today should go a long way towards addressing one side of the delivery problem. We now need a bold strategy to resolve planning, so that we can make good on our promise to deliver 15% of energy from renewables by 2020, commented McCaffery.