EIB sets up £700m fund to help onshore wind farms

The European Investment Bank (EIB) has opened a £700m fund to tackle the lack of finance for the UK's onshore wind farm developers.

There are 84 wind farm projects – with a 3.4 gigawatts (GW) total capacity equal to the UK's total installed base – that have stalled because of developers' inability to raise the debt.

Under the new arrangement, designed by the Government to address the liquidity problems, the EIB itself will not be exposed to any direct risk or tied up in the necessary due diligence for the proposed projects.

The £700m will be made available to Royal Bank of Scotland, Lloyds Banking Group and BNP Paribas, who will match the funds themselves and do all the work related to granting the loans.

Maria McCaffery, the chief executive of the British Wind Energy Association, said: "Wind energy has never been a risky investment. Wind farms in the UK have never defaulted on their loans. But the recent turbulence in the financial markets has affected availability of loan finance for smaller and medium-sized projects."

The new funds became available yesterday, the day after the Government published draft National Policy Statements aimed at speeding up planning consent in the energy sector.