UK Government: Extra finance to start flowing
for wind power
Jul 27, 2009 -- M2 PRESSWIRE
Three UK-based banks start work today with the European Investment Bank (EIB)
on a programme to lend up to GBP1 billion to onshore wind farms over the
next 3 years.
- Up to GBP1 billion of loans for onshore wind farms
- Up to GBP10 million of Government grants for offshore wind technology
development
Three UK-based banks start work today with the European Investment Bank (EIB)
on a programme to lend up to GBP1 billionto onshore wind farms over the next
3 years.
The cash, part of the additional GBP4 billion of EIB lending to support UK
energy projects announced in the Budget, will help get building started for
onshore wind projects which have been hit by the credit crunch, particularly
small and mid-sized wind farms.
The banks - RBS, Lloyds and BNP Paribas Fortis - have been teamed up with
the EIB by the Department of Energy and Climate Change (DECC) and HM
Treasury, following the announcement in April's Budget Statement that the
Government wanted to get more EIB lending to UK renewables.
Firms can also apply for DECC cash from today to develop offshore wind
technology. There will be up to GBP10 million in grants, part of the GBP120
million announced in the renewable energy strategy last week to support
offshore wind. This is the second round of cash for development of offshore
wind technology.
DECC is also confirming today that, subject to agreement on suitable grant
offer conditions, it also intends to make an award under the first round of
this programme for Vestas Technology UK Ltd's research and development
centre on the Isle of Wight. This proposed award - more than GBP6 million -
would include over GBP3m of funding from the South East England Development
Agency (SEEDA). We expect to make other announcements on awards under this
first round of funding shortly.
Energy and Climate Change Secretary Ed Miliband said:
'Earlier this month we laid out a transition plan to a low carbon economy
that included a massive expansion of green wind energy. The resources we are
announcing back up our plans with clear actions to ensure we deliver.
'The European Investment Bank funds will help the building start on
consented wind farms that could provide 1 gigawatt of electricity, enough to
power more than half a million homes.
'The money for the development of offshore wind manufacturing will help us
generate green jobs on top of our success as the leading country in the
world for the generation of offshore wind.
"Alongside these proposals, we are reforming planning laws, finding new ways
of working with local communities and are determined to persuade people that
we need a significant increase in onshore wind as part of the UK's future
energy mix.
'That is essential for the generation of renewable energy and for Britain to
have an industrial future in the production of onshore wind."
Ian Pearson MP, Economic Secretary to the Treasury said:
'The GBP4bn of lending to the energy sector that we announced in the Budget
is just part of the GBP10bn of lending that we hope to see coming into the
UK economy from the EIB this year, nearly three times last year's total. I
am pleased at the success we are having working in partnership with EIB to
provide financing to this and other important sectors.'
EIB Vice President Simon Brooks said:
'The development of the UK's wind energy capacity will support the European
Union's and national targets for renewable energy generation. As well as
helping to reduce greenhouse gasses it will strengthen the security of
energy supplies. This initiative underlines the EIB's long involvement, as
the EU's financing arm, in the UK's energy sector and reinforces efforts to
reduce the impact of climate change'.
Notes to editors
1. As part of a wider package supporting investment and the low carbon
sector, Budget 2009 said that 'UK renewable and energy projects stand to
benefit from up to GBP4 billion of new capital from the European Investment
Bank (EIB) through direct lending to energy projects and intermediated
lending to banks. The Government is bringing together the EIB, banks and
developers to ensure this new framework lending and other products deliver
rapid and sustained investment for UK renewable energy. The Government
believes that this initiative can bring forward GBP1 billion of consented
small and medium-sized UK renewables projects to deployment.'
2. DECC and HM Treasury strongly welcome the EIB's intention to launch an
intermediated lending scheme in the UK, targeting the deployment of small
and medium sized renewables, particularly onshore wind. This segment of the
renewables market has struggled to access project finance as a result of the
credit crunch. Improved liquidity in the project finance market should help
developers bring forward otherwise economically viable projects which are at
risk in the current economic conditions.
3. Loans will be available for eligible projects in the Autumn once the
banks have agreed funding arrangements with the EIB which is planning to
make up to GBP600m of its own funds available to match the banks' lending.
The EIB will match up to 50% of the project debt with the participating
banks, potentially allowing for up to GBP1 billion of loans.
4. The EIB will provide funding to banks for loans to eligible projects. 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 resource.
5. Following discussions with the developer community, it is clear that
there are a significant number of projects that would stand to benefit from
the cheaper funding that this scheme would release, subject to the projects
meeting the EIB and Banks eligibility criteria.
6. The European Investment Bank (EIB) is the European Union's long-term
financing institution which supports projects promoting European Union
objectives, in particular small and medium-sized enterprises (SMEs), 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 GBP13 billion for projects in the UK, including over GBP3 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.
7. The first GBP10 million call under the Low Carbon Energy Demonstration (LCED)
capital grants scheme was launched on 28 May 2009. It was designed to
address a critical barrier facing the deployment of renewable offshore wind
generation in the UK, namely the growth in demand for renewables generation
beyond the capacity of the supply chain to deliver. It is specifically aimed
at bringing forward the demonstration of new components or technology to
support the earlier deployment of large-scale multi-MW wind turbines to
enable their deployment within 2020 timescales. It also aims to provide a
learning experience which can improve confidence and help reduce future
costs; and underpin development of the industry by stimulating the UK supply
chain.
CONTACT: Media Relations Manager, SEEDA e-mail: JessicaStewart@seeda.co.uk
Tel: +44 (0)1483 501 307
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