The Role of Multilateral Banks and ECAs
This chapter examines how equity investors and potential lenders look at the wind sector and in what ways they can be expected to contribute. It focuses on Europe, as the US are still at the pioneer stage, whilst Chinese projects are likely to be funded under specific local conditions. Offshore wind offers utilities the possibility to deal with large industrial suppliers with which they have much more extensive dealings. Recent experience in the offshore wind sector has shown that such EPC contractors can experience severe failures and cost overruns, whether they are turbine manufacturers, marine contractors or general contractors, whereas project financed wind farms have been built within the budget and timetable agreed with the banks at financial close. Utilities, which have not allowed banks such an extensive role in their projects so far, have been frustrated by the project finance market refusal to take construction risk on the basis of their internal contractual negotiation skills and project management capabilities.