Offshore Wind Must Lure Institutional Investment, Rabobank Says

Nations with offshore wind plans must lure institutional investment or risk missing goals to build turbines at sea, according to Rabobank International.

“There is a tremendous pipeline of offshore wind project financing coming up,” Simone van Gendt, senior vice president in project finance, said in an interview.

“Banks and investors are convinced that without institutionals, these plans will never materialize,” Twan Geurts, global head of project finance, said during the same interview by phone.

European nations are seeking to build thousands of offshore turbines to secure power supplies and boost flagging economies. Germany wants 25 gigawatts of turbines by 2030 from about 400 megawatts now while the U.K. delayed by a decade to 2030 a plan to reach 18 gigawatts from about 3.7 gigawatts currently. A Netherlands accord signed this month targets a fourfold increase to about 4.5 gigawatts by 2023.

“If you look at the amount of debt financing that’s required for all these projects and the relative long tenors, then you basically need to find alternative ways to have that finance,” van Gendt said.

Banks should focus on the more risky construction phase of offshore wind while institutional investors such as pension and insurance funds that have long-term liabilities should pick up financing of the projects’ operational stage, she said.

Denmark’s PensionDanmark A/S and Dutch pension administrator PGGM NV already financed wind at sea. Rabobank is involved in “many” offshore wind transactions, van Gendt said, without giving details. Deals the bank already worked on include the Belwind project and the Northwind venture, both off Belgium.

The Amsterdam-based bank is also working on a large onshore wind farm in the Netherlands, operations in India and China, and recently closed financing on a Chilean solar plant, Geurts said.

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