Germany’s export credit agency Euler Hermes is backing 95% of a €26mn (US$34.4mn) loan from BayernLB for the delivery of 15 wind turbines to the Seyitali-Aliaga wind farm in northwest Turkey.

The 16-year bilateral loan has been awarded to German wind energy firm Enercon, which is delivering the turbines to the site.

While the exact pricing of the deal has not been made public, Ralf Engelberg, first vice-president export and trade finance at BayernLB, tells GTR that it was a “normal price for this type of transaction.”

“The Turkish businesses drove a hard bargain,” Engelberg adds.

The German mid-cap has already set up a subsidiary in Turkey to manufacture rotor blades and towers on site, which is expected to have an output of around 30MW on completion next year.

The project is being run by Turkish firm Doruk Enerji, a company that is owned equally by Derimer Holding and Polat Enerji.

“By financing the Seyitali-Aliaga wind farm, BayernLB is demonstrating its renewable energy expertise once again. We accompanied Germany companies in this sector for years as a reliable project and export finance partner both at home and abroad,” say Jan-Christian Dreesen, a member of the BayernLB management board.

However, GTR can reveal that the deal had to overcome an unforeseen problem when the Turkish military decreed that all wind farms in the country must be examined to see if they could potentially obstruct flight paths.

Engelberg comments: ““It was just as we were ready to sign the agreement when the Turkish military wanted to approve every single wind park in Turkey to check the flight path routes. As we knew that there was no flight path in the area of the wind farm, in the beginning we added only two or three weeks to the project, however, in the end it took longer.

“Furthermore we discussed very intensive the legal issues of such cross-border financing with the customer.”

Since Turkey got its first wind farm in 2000, the country’s wind farm power capacity has risen dramatically and is expected to reach an output of 13,000MW by 2013, and 20,000MW by 2020.

This rise in wind farm power capacity follows the Turkish government’s 2004 decision to actively promote alternative energy sources.

This was brought into legislation in 2005 when the country passed a renewable energy law to bring the country in line with EU standards, however, at the time the law was criticised for offering a government guarantee of around €5c for every kilowatt hour of renewable energy as that is lower than incentives in most European countries.