WindEurope Association produced a report on the European wind energy financing in 2017. The overall investments in the European wind energy totalled €51.2 bn, which is 9% more than in 2016.
The increase was mainly due to a low interest rate and strong capital liquidity. Wind energy accounted for a half of all energy investments in 2017. Wind energy was the main driver of European energy development owing to its role in reducing dependence on hydrocarbon fuels. Now, the competitive wind energy becomes increasingly more attractive for the EU and other market players looking to diversify their investments.
The main types of wind energy financing were debt and equity capital. There were two major types of loans: construction and refinancing debt. New project financing accounts for €22.3 bn out of €51.2 bn invested in the EU wind energy in 2017. Refinancing amounted to €6.9 bn, project acquisitions – €9.1 bn, company acquisitions – €5.3 bn and capital market transactions – €7.6 bn, accordingly.
However, in 2017, new project financing dropped by 19% compared to the previous year. The main reasons behind the new project financing decrease were the fall in technology and equipment prices as well as the drop in the volume of investments in offshore wind farm development.
On the contrary, financing through project and company acquisitions doubled in comparison with 2016. An important source of investments into the sectoral projects were the so-called green bonds that raised €17.5 bn in 2017, representing the highest level of issuance in the last five years.
Western and Northern Europe (led by Germany and the UK) account for the highest share of wind energy financing. In Southern and Eastern Europe, though, new wind farm financing remains low: in 2017, it amounted to 3.5 bn only, or 16% of all new investment projects.
The report forecasts that financing volumes will increase in 2018 due to the rollout of auctions. The downward trend in interest rates, that has facilitated the growth of debt project financing, is expected to slow down in the near term.
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