Financing large-scale wind parks through the cooperative financial sector

While the focus in the early days of wind farms was on coastal sites, given technical progress today operating wind energy plants is also economically viable in other rural regions. Technological progress has led to an on-going increase in the output of wind turbines. The size of wind farms is also gradually increasing, which leads overall to larger financing volumes that the small regionally organized cooperative banks can only muster with assistance from a cooperative central bank. The local banks are support by experts in the field of renewable energy from the cooperative central bank - irrespective of whether one wind turbine or an entire wind farm is to be financed. For example, large-size wind-farm financing packages -and in the case of five turbines this can swiftly exceed 20 million euroscan be handled as a financing consortium consisting of the cooperative bank and the central bank. Alongside long-term loan financing and reliance on the relevant government subsidies, the range of services also includes variable financing forms, and this extends to interest and exchange-rate hedges. Financing individual wind farms tends to be structured as project financing, meaning that a closed-end investment project is launched that constitutes a single economic and legal entity. The debt is exclusively serviced from the wind plant's cash flow. Depending on the expertise and needs of the regional cooperative bank, the central bank supports it in all project phases as regards financing one or several wind plants or farms. Rural cooperative banks can only manage to finance large-size wind projects through collaboration between the decentralized cooperative banks and the cooperative central bank. Financing large-size wind farms by cooperative banks will be compared below to other private-sector or government-supported forms of bank financing in Germany and the differences identified.