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."A reader last week asked how the financial meltdown could affect the Bluewater Wind project here in Delaware:
But I was wondering what your thoughts are on the possibility that Blue Water might run into financing difficulties due to the global economic implosion. After all, alternative energy projects are still considered high risk, and given the tightness of the credit markets, I could easily picture a financing problem either postponing or perhaps even killing a large wind power project such as the one Blue Water has planned for Delaware.The Bluewater project is different from the European projects, which don't have the benefit of a long term power purchase agreement or PPA. Financing is much easier when investors see a secure revenue stream, as the Bluewater PPA provides. Fortunately, Bluewater won't need much of its capital right away. The Financial Times reports that parent company, Babcock ">:
Babcock ">While it appears that B&B's overall corporate structure is under pressure, the B&B wind fund, which is separately listed on the Australian stock exchange, is profitable. Also, the PPA between Bluewater and Delmarva Power, with its contractual revenue stream, is in itself an asset. Whatever happens to B&B, I expect Bluewater to find the financing to build the wind farm.
