In 2021, commercial loans for wind farms construction cost about 1.2-1.5 million euros for every megawatt of installed capacity.
Effective interaction between financial institutions and energy companies is a prerequisite for the growth, development and modernization of the wind energy sector, facilitating the introduction of more expensive generation and transmission technologies, the development of new locations, the implementation of larger projects and economies of scale.
Medium-sized projects in this industry can cost owners hundreds of millions of euros, requiring active leverage at the earliest stages, including long-term bank financing.
Commercial loans for wind farms, including the implementation of ongoing measures are tend to improve the environmental friendliness of wind farms.
VIOLA FUNDING LIMITED has brought together a multidisciplinary team of financial experts specializing in renewable energy projects, including wind farms, solar power plants, biogas and geothermal projects. We accompany clients at all stages of the project, including planning and financial modeling, lending, debt service and refinancing.
The financial engineering services offered are tailor-made for a specific project and help to satisfy the interests of project participants.
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Bank lending of wind energy projects
Successful bank financing starts with high-quality planning, development of technical and financial documentation, obtaining the necessary permits and licenses.
Attracting large bank loans for the construction of a wind farm is a complex multi-level task that should be entrusted to a professional team at an early stage.
This is natural, since the bank is striving to reduce risks in every possible way. The financial institution, among other things, has the right to request from the company detailed information about the wind farm project itself, as well as about other assets, operating activities for a certain period, and much more.
Successful bank financing starts with high-quality planning, development of technical and financial documentation, obtaining the necessary permits and licenses.
Commercial loans for wind farms based on project finance includes the following sources of capital:
• Senior debt, Usually these are loans from banking syndicates and international financial institutions.
• Equity investments that form the equity of a wind energy project. The recommended contribution of initiators in such projects usually does not exceed 25-30%.
• Subordinated debt of the project, which includes obligations of the company at a lower level than other debt obligations. Such funding may be provided by project participants.
Commercial loans for wind farms project is currently a form of debt financing for investment projects as offshore wind farms with huge costs.
This area is well mastered by the largest commercial banks around the world. The leading positions in this area belong to the commercial banks of Great Britain, Germany, Holland, France, Japan, the USA and other developed countries. In addition, the International Bank for Reconstruction and Development, the European Bank for Reconstruction and Development and other international financial institutions are showing interest in lending to wind energy projects.
Commercial loans for wind farms construction
Given the enormous investment needs of wind farm projects in the early stages, these lending instruments are extremely useful.
Commercial loans for wind farms remains feasible once the project owner meets the following requirements:
• As a rule, it can be issued only after the borrower has fully repaid the debt on previous loans.
• A loan is provided only to finance a project or business operation, the analysis of which indicates their profitability, taking into account the economic situation, risks in a particular sector of the national economy and market trends.
The use of C&I loans in wind energy projects allows the company to provide the necessary funds for the uninterrupted production process, increase profitability and strengthen control over the implementation of sales plans and profits, as well as save own working capital.
In general, investment and commercial loans are in the nature of short-term business financing with a maturity of up to 2 years.
If you need commercial loan for wind farms, project finance (PF) or long-term bank financing with flexible terms?
Contact US for assistance.
We are ready to offer a customized financial solution for any wind energy project.
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