Banks Grant £1.4B in Loans for Onshore Wind Farms in U.K.
November 13, 2009 // Published as a news service by IHS
The deals - supported by the U.K.'s Treasury and Department of Energy and Climate Change - could enable the construction of new onshore wind projects worth around £1.4 billion ($2.33 billion) over the next three years.
The EIB will provide up to £700 million of the new financing, with the remainder matched by the Royal Bank of Scotland, Lloyds Banking Group and BNP Paribas Fortis.
The loans will be available to eligible onshore wind projects with a total project cost of £20-100 million and will run for 15 years. The eligibility criteria are designed to ensure that the projects have an acceptable environmental impact and are located in commercially viable locations in terms of wind resources.
"We welcome the EIB's commitment to provide this vital funding for renewable projects across the U.K. The money that is being made available will help continue the essential work of building the U.K.'s capacity in renewable energy," said Chancellor of the Exchequer Alistair Darling. "As the Government continues to push for a global agreement on climate change at Copenhagen it is even more important that we live up to our responsibilities and make progress in reducing this country's dependence on carbon. This Government is determined to provide all the support that is needed to secure a greener future."
Energy and Climate Change Secretary Ed Miliband said, "The U.K. now has four gigawatts of wind capacity. And the pace of installation is picking up. It took us 14 years to build the first gigawatt, and just one year to build the last. But we still need a six-fold increase in renewables by 2020 to hit our renewables target. That target is vital if we are to be on course to cutting emissions by 80% by 2050. So we need to pull out the stops including making sure the capital is there to build the wind farms in the first place. This partnership of the EIB with RBS, BNP Paribas Fortis and Lloyds Banking group will address that problem."
Simon Brooks, EIB's European vice president responsible for the U.K. said, "The EIB's contribution to transforming wind energy generation in the United Kingdom is a core element of our support for renewable energy technology across Europe. We are sure that targeted support, following U.K. and European Union policy combating climate change, will facilitate rapid and sustained investment in the industry and promote continued transformation to a low-carbon economy."
The wind farm developers and the banks will have an opportunity to start brokering the deals at an upcoming forum in London.
Background
The European Investment Bank is the long-term financing institution of the European Union (EU), which supports projects promoting EU objectives - in particular, small and medium-sized enterprises, projects supporting energy and mitigation of climate change, and investment in the poorer, "convergence" regions.
In the last five years - 2004 to 2008 - the EIB lent over £13 billion for projects in the U.K., including over £3 billion in 2008 for investment to help regional development, protect the environment, promote clean and secure energy sources, improve education facilities, promote the development of national and regional transport, and support the activities of small and medium-sized enterprises.
Source: European Commission (EC).