Renewable energy exports are booming worldwide, but the sector is still heavily reliant on export credit agencies, writes Melodie Michel.
According to the US Energy Information Administration, global renewable electricity generation is expected to grow by an average of 3.1% per year between 2008 and 2035 – faster than all other energy sources. As energy demand keeps growing and fossil fuel sources are declining, the renewable sector is gaining market share.
However, as the industry’s precise performance is hard to forecast, it suffers from a certain lack of appetite from lenders, giving export credit agencies (ECAs) a crucial role in its development.
In fact, ECA support for renewables has grown exponentially in the past few years. For example, US Exim financing for exports of clean energy equipment more than doubles every year, and has grown from US$6mn in 2007, to US$720mn in 2011. Vandana Gombar, senior analyst at clean energy data provider Bloomberg New Energy Finance (BNEF), tells
GTR: “You can’t really find an ECA that doesn’t have a clean energy portfolio now. Maybe a couple of years ago they didn’t, but today all of them are active in this area.”
Traditional players in the sector have been joined by new entrants such as UK Export Finance and Korea Eximbank, and ECAs have started to involve new types of investors into these projects. For instance, in May, Denmark’s EKF covered its second export loan provided by a pension fund, to be used mainly on wind farms. At the time, the ECA told GTR that as pension funds prefer relatively large projects with a stable cashflow over a long period, wind farms were what fit their investment profile best.
Gombar explains that as traditional lending sources have shrunk, there has been more space for ECAs to expand their activities. “Pre-2008, you didn’t have a lot of people looking at ECAs because credit was available and they seemed like a long, paper-heavy route to get financing. But once traditional commercial sources of financing started shrinking, they became a very compelling alternative.”
BNEF research shows that debt and equity investments in renewable energy fell by 20% between Q3 2011 and Q3 2012, especially in the wind sector, an area that ECAs seem eager to support; the wind industry represents 48% of Denmark’s EKF’s total exposure. “They seem to have a higher risk appetite,” Gombar adds.
From a corporate perspective, having the support of an ECA allows for more favourable pricing arrangements, while banks rely on ECAs to venture into new renewable energy markets. Kathrin Eich, group head of structured export finance at Commerzbank, says: “ECAs are becoming more and more of interest for project development companies as well as corporates, and the more ECAs come into the focus of clients, the more new markets we enter. Without ECAs, we couldn’t have entered markets like Turkey and other countries in Eastern Europe where a pure non-ECA-covered financing would not have been possible. We feel comfortable with those country risks because we have ECA cover to back us.”
She explains that European exporters have had to look for new markets as government incentives in Western Europe have been interrupted. “The German and Western European renewable energy market is very strong, but the legislation in some of these countries has been put on hold, so wind turbine and solar exporters have to look for new markets where there may be higher sovereign risk,” she tells GTR, pointing out that ECA cover is what makes this expansion possible.
Among emerging renewables markets, Turkey seems increasingly attractive to Western European exporters. Interestingly, the push comes from corporates more than from government policies or project developers. Eich explains that Commerzbank has seen a lot of corporate-driven deals, in which family-owned businesses have decided to start activities in renewable energies and to buy wind turbine themselves without a project developer backing them. They make contracts with wind turbine suppliers and the bank finances them on the basis of corporate risk with ECA cover.
Eich adds that this type of deal is easier for banks to support than project finance deals, as they do not depend on each country’s legislation, but on the corporate’s balance sheet. “If you go into project finance, where you have to rely on the future cashflows coming from the project, it’s very important to know what kind of tariffs you get, who determines them and for how long they are secured, who’s your offtaker, who’s paying you for the electricity generated etc.
“Some of the countries, for example Poland, have legislation in revision so project developers have to wait until they know what the new legislation will be on how the electricity tariffs will be set and what kind of subsidies will be given,” she says.
Commerzbank also sees more and more requests from Asian countries like Indonesia or the Philippines, but these markets take longer to penetrate, as they are project finance-based. The bank looks for markets where the pipeline of projects is sufficient to start the analysis of the prevailing legislation, parties and competitive environment. “You also have to check if there are any plans for nuclear power plants or coal-fired power plants which could become competition for your own project. It is a big effort to understand a new market with its own framework, so for now the focus is mainly on Eastern Europe,” Eich explains.
In the US, the government is supporting solar panel exporters wanting to break into new markets in South America, the Caribbean and India.
US Exim recently guaranteed a 10-year US$6.4mn loan from PNC Bank in Pittsburgh for the construction of a solar power system in Barbados, and backed a US$32.1mn Brazilian wind farm project.
The US is also active in Africa, and US Exim signed a US$2bn green energy scheme with South Africa in August. However, African renewable deals are still considered too risky for banks, and tend to fall under the remit of multilaterals. Commerzbank’s Eich says: “Hydro projects in Africa for example are still in the remit of the World Bank and other multilaterals. They are not being financed through commercial banks, or only to a small extent.”
She adds that hydro projects in general remain more controversial than wind or solar due to environmental concerns. “We have had some project presentations for hydro, but it’s not as easy as wind since it raises a lot of social and environmental issues.
“Big hydro projects in Turkey and China have a lot of NGOs fighting against them. You can’t just concentrate on the project as such, but you have to take care of the social and environmental implications of the project. As a financier you have to assume these responsibilities, as well as meet your internal guidelines,” she points out.
Germany is facing a particular dilemma, as government subsidies for renewable energy production have stopped, yet demand for alternative power sources is bound to increase as the country has pledged to phase out nuclear energy by 2020. Barclays head of trade and working capital Eugenio Cavenaghi explains: “Germany managed to achieve a leading position as an exporter in the solar industry because of early days policies from the government, which incentivised the production and installation of solar panels. It was very good to give a start to the industry, but what we need now is the ability to deploy these technologies in a mass way.” He adds that switching from nuclear to green power is going to take renewables from a niche product to an indispensable part of the German energy mix. “Consultants have calculated that by 2020 there will be an aggregated investment of between €100-200bn in German green energy alone.”
In terms of sectors, Germany is counting on wind for the strongest growth, as the solar industry faces increased competition from Chinese manufacturers. In fact, German chancellor Angela Merkel recently called for discussions with the Chinese authorities after Solarworld, Germany’s biggest solar panel maker, led a push by about 25 European manufacturers for the European Commission to look into alleged dumping practices by Chinese exporters.
“According to recent studies, the highest potential in Germany is wind,” adds Cavenaghi. “There are already a lot of ongoing projects for the construction of wind parks offshore in the North Sea where there is a lot of wind to be captured. There are also a lot more wind farms growing inland.”
Cavenaghi explains that a transaction the bank might finance could be a wind park being built offshore, and which requires a cable structure to be imported from a southern European provider to connect it to the power grid on land. “The cables alone are more or less as expensive as the wind turbines themselves, because of the distance and the special type of equipment you need to bring the energy from the park down to the land over several hundreds of kilometres without losing power,”
“In such case, there will be massive amounts of receivables that are generated from the manufacturer of the cables towards the entity that is building the wind park in northern Europe, and we would help the supplier by purchasing and discounting the receivables so that they always have free cashflow and keep their working capital under control while their order book is increasing, because luckily the whole sector is growing and demand is increasing.”
This privacy statement does not cover the activities of third parties, and you should consult those third-party sites’ privacy policies for information on how your data is used by them.
Any questions regarding this Policy and our privacy practices should be sent by e-mail to firstname.lastname@example.org or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.
Established in 2002 and with offices in London and Singapore, Exporta Publishing & Events Ltd is the world’s leading trade and trade finance media company, offering information, news, events and services for companies and individuals involved in global trade.
Our principal business activities are:
Exporta Publishing & Events Ltd is a company registered in the United Kingdom with company number 4407327 | VAT Registration: 799 1585 59
This Data Protection Policy explains when and why we collect personal information about people who visit our website, how we use it, the conditions under which we may disclose it to others and how we keep it secure.
Why do we collect information from you?
Our primary goal in collecting personal data from you is to give you an enjoyable customised experience whilst allowing us to provide services and features that will meet your needs.
We collect certain personal data from you, which you give to us when using our Site and/or registering or subscribing for our products and services. However, we also give you the option to access our Sites’ home pages without subscribing or registering or disclosing your personal data.
We also collect certain personal data from other group companies to whom you have given information through their websites (including, by way of example, Exporta Publishing & Events Ltd and subsidiaries, in accordance with the purposes listed below). Should we discover that any such personal data has been delivered to any of the Sites, we will remove that information as soon as possible.
This Data Protection Policy ensures Exporta Publishing & Events Ltd:
We may change this Policy from time to time so please check this page occasionally to ensure that you’re happy with any changes. By using our website, you’re agreeing to be bound by this Policy.
The Data Protection Act 1998 described how organisations – including Exporta Publishing & Events Ltd – must collect, handle and store personal information. These rules apply regardless of whether data is stored electronically, on paper or on other materials. To comply with the law, personal information collected must be stored safely, not disclosed unlawfully and used fairly.
The Data Protection Act is underpinned by eight important principles. These say that personal data must:
We obtain information about you when you use our website, for example, when you contact us about products and services, when you register for an event, register to receive eNewsletters, subscribe or register for a trial to our GTR magazine/website.
On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.
This information is used to administer and deliver to you the products and/or services you have requested, to operate our Sites efficiently and improve our service to you, and to retain records of our business transactions and communications. By using the Sites and submitting personal information through the registration process you are agreeing that we may collect, hold, process and use your information (including personal information) for the purpose of providing you with the Site services and developing our business, which shall include (without limitation) the purposes described in the below paragraphs.
Where, as part of our Site services, we enable you to post information or materials on our Site, we may access and monitor any information which you upload or input, including in any password-protected sections. Subject to any necessary consents, we also monitor and/or record the different Sites you visit and actions taken on those Sites, e.g. content viewed or searched for. If you are a registered user (e.g. a subscriber or taking a trial), when you log on, this places a cookie on your machine. This enables your access to content and services that
are not publicly available. Once you are logged on, the actions you take – for example, viewing an article – will be recorded (subject to any necessary consents). We may use technology or a service provider to do this for us. This information may be used for one or more of the following purposes:
Please see paragraph 5 below for more information on cookies and similar technologies and a link to a page where you can turn them on or off.
Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies. We give you the opportunity to opt-out of receiving marketing communications. Further detail can be found on the applicable Site and in the footer of each marketing communication sent by us, our group companies or service providers. See also “Consents and opt-outs” section below. We will not share your information with third parties for marketing purposes.
We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.
When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.
Many sites do this whenever a user visits their site in order to track traffic flows, recording those areas of the site that have been visited by the computer in question, and for how long.
Users have the opportunity to set their computers to accept all cookies, to notify them when a cookie is issued, or not to receive cookies at any time. Selecting not to receive means that certain personalised services Exporta Publishing & Events Ltd offers cannot then be provided to that user.
All of the major browser providers offer advice on setting up and using the privacy and security functions for their products. If you require technical advice or support for a specific browser/version please contact the provider or visit their website for further details: www.microsoft.com / www.mozilla.com / www.apple.com / www.opera.com / www.aol.com / www.netscape.com / www.flock.com / www.google.com.
Most web browsers automatically accept cookies but, if you prefer, you can change your browser to prevent that, or to notify you each time a cookie is set. You can also learn more about cookies in general by visiting www.allaboutcookies.org which includes additional useful information on cookies and how to block cookies using different types of browser. Please note however, that by blocking, deleting or turning off cookies used on the Site you may not be able to take full advantage of the Site.
E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.
So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.
To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.
You can give your consent to opt-out of all or any particular uses of your data as indicated above by:
To turn cookies and similar technologies on and off, see the information in paragraph 5 above. Any questions regarding consents and opt-outs should be sent by e-mail to email@example.com or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.
Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.
We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.
Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.
Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.
We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.
However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.
We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:
All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.
Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility. The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.
Name of Data Controller
The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.
Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.
Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:
In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.
We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.
Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.
To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.
We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.