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Wind Subsidies Blowing Strong In Bankrupt Greece

Anna Hirtenstein, Bloomberg

“It’s the only sector that never suffered a slowdown.”

Wind power is blowing back against a fifth year of contracting Greek credit as banks keep funding renewable energy projects that deliver secure cash flows.

Greek banks are preparing to finance as much as 1.3 gigawatts of new wind power even as their lending to companies shrank for a 58th-straight month in April, according to Norton Rose Fulbright LLP, a law firm advising on deals. Even as the country’s debt crisis forced lenders to plug a 14.4 billion-euro ($16.1 billion) hole in their balance sheets, renewable wind energy has remained attractive for investment banks and developers.

“It’s the only sector that never suffered a slowdown even though we’ve had the difficulties,” said Ellie Kakoullou, head of structured finance at Alpha Bank AE in Athens. “The one sector that the banks have continually financed post-Lehman, through the Greek crisis and today as well, is the wind energy sector.”

Clean energy is being prioritized in Greece, where the economy shrank 0.4 percent in the first quarter and businesses are still groping for stability after six years of political and economic turmoil. The energy ministry has guaranteed renewable generators that all of the power they supply will be bought. Even as consumption slumped with the economy, clean energy plants are still running at full capacity.

“It was the first industry with a project finance structure so the banks know it and feel comfortable in this industry,” according to Dimitris Assimakis, partner at Norton Rose Fulbright. “There’s not so much else to do in Greece in terms of project finance. The banks want to earmark all the funds they got from the recapitalization to sectors of economy with a productive effect.”

Up to 50 wind projects with a combined capacity of 1.3 gigawatts are under development in Greece and have to be commissioned by March 2018 in order to lock in government contracted feed-in tariffs, according to Assimakis. It may cost as much as $2 billion if they are all built, according to Bloomberg New Energy Finance.

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