Predictions for renewable energy finance in 2016

Inspiratia, 6 January 2016

“2016 will likely be the first time we see more than 10 offshore wind financings in one year. Some may not close until 2017 but the processes will certainly start next year.
There are projects in Belgium, Germany, the UK, plus the Dutch and Danish tenders – and we could also see the first projects in France coming to market. 

There’s probably going to be a few refinancings, as well as several asset sales – some of which could include debt financing. Altogether, 2015 was amazingly active, but 2016 promises to be even better. There is a lot of liquidity in the market and that will continue, with more banks coming in, larger tickets available and institutional investors clearly attracted to the debt side as well. But since there are now many more projects chasing it, there’s going to be a new balance between liquidity and projects – and it’s not clear yet where the balance will end up. Banks can afford to be pickier.

Good projects will still find funding on attractive terms but it might be hard to go for the most aggressive structure unless you have a very compelling reason – and some transactions might be delayed if they misread the market.  There will also be newcomers on the equity side – both financial and corporates. A lot of them have been looking at the sector but many haven’t closed transactions yet and should more easily find opportunities to do so today. 2016 stands a good chance to be the year when the first 8MW wind turbine is financed.

Finally, one of the open questions of the year will be around floating wind. Will there be commercial projects and will they successfully raise finance? My bet is that the process will at least get on its way in 2016. ”

See all other predictions on inspiratia’s website (subscribers only)

Jérôme Guillet co-founded Green Giraffe in 2010 and was a Managing Director until 2021.