Europe invested a total of € 51.2 billion in wind energy in 2017. The development of new farms accounted for € 22.3 billion of this. This is according to WindEurope’s ‘Financing and Investment Trends’ report.
The rest of the investment went on the refinancing of existing wind farms, the acquisition of projects and of companies involved in wind and on public market fundraising. The total investment figure was 9% up on 2016. The € 22 billion invested in new wind farms was down on the € 28 billion invested in 2016. But it covered more capacity - 11.5GW compared to 10.3GW - reflecting the falling costs of wind energy. wind energy accounted for half of all power sector investments in 2017.
The maturity of the wind energy sector and the competitive pressure of auctions is changing the way wind projects are financed. Power producers still carry projects on balance sheet through Final Investment Decision (FID). But refinancing and the sale of minority stakes in projects are coming in much earlier in the process.
And more investors are entering projects as equity partners, particularly from the financial services industry. These partnerships allow power producers to ‘recycle’ capital to finance new wind farms. A healthy pipeline of projects is diversifying the pool of investors: 82 lenders were active in 2017, including multilateral financial institutions, export credit agencies and commercial banks from both Europe and Asia.
Green bonds are emerging as an alternative source of debt. This is also helping risk-averse institutional investors to access the wind sector. Green bonds raised € 17.5 billion in 2017, the highest rate of issuance in the last five years. € 8.5 billion were in corporate renewables portfolios, € 7 billion in wind energy and € 1.9 billion in transmission lines.
20 European countries made investments in wind in 2017 compared to 16 in 2016 - though Germany and the UK accounted for half of all new FIDs. Investments in Southern and Eastern Europe remain low, representing just 16% of the total new assets financed in Europe (€ 3.5 billion).