Three UK-based
banks start work today with the European Investment Bank (EIB) on
a programme to lend up to £1 billion to onshore wind farms over
the next 3 years.
- Up to £1 billion of loans for onshore wind farms
- Up to
£10 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 £1 billion to
onshore wind farms over the next 3 years.
The cash, part of the additional £4 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 £10 million in grants, part
of the £120 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 £6 million - would include over £3m 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 £4bn of lending to the energy sector that we announced in
the Budget is just part of the £10bn 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 £4 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 £1 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 £600m 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 £1 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 £13 billion for projects in
the UK, 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.
7. The first £10 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.
8. SEEDA Media Relations Manager: JessicaStewart@seeda.co.uk
01483 501307
Contacts:
Department of Energy and Climate Change
nds.decc@coi.gsi.gov.uk
Nick Turton
Phone: 0300 068 5224
nick.turton@decc.gsi.gov.uk