Three UK-based banks start work today with the European Investment Bank (EIB) on a programme to lend up to £1bn to onshore wind farms over the next three years.
The cash, part of the additional £4 billion of EIB lending to support UK energy projects announced in the Budget, will help get building started for onshore wind projects which have been hit by the credit crunch, particularly small and mid-sized wind farms.
The banks – RBS, Lloyds and BNP Paribas Fortis – have been teamed up with the EIB by the Department of Energy and Climate Change (DECC) and HM Treasury, following the announcement in April's Budget Statement that the government wanted to get more EIB lending to UK renewables.
Firms can also apply for DECC cash from today to develop offshore wind technology. There will be up to £10 million in grants, part of the £120 million announced in the renewable energy strategy last week to support offshore wind. This is the second round of cash for development of offshore wind technology.
DECC is also confirming today, subject to agreement on suitable grant offer conditions, it also intends to make an award under the first round of this programme for Vestas Technology UK's research and development centre on the Isle of Wight. This proposed award – more than £6m – would include over £3m of funding from the South East England Development Agency (SEEDA). It expects to make other announcements on awards under this first round of funding shortly.
Energy and climate change secretary Ed Miliband said: "Earlier this month we laid out a transition plan to a low carbon economy that included a massive expansion of green wind energy. The resources we are announcing back up our plans with clear actions to ensure we deliver.
"The European Investment Bank funds will help the building start on consented wind farms that could provide 1 gigawatt of electricity, enough to power more than half a million homes.
"The money for the development of offshore wind manufacturing will help us generate green jobs on top of our success as the leading country in the world for the generation of offshore wind.
"Alongside these proposals, we are reforming planning laws, finding new ways of working with local communities and are determined to persuade people that we need a significant increase in onshore wind as part of the UK's future energy mix.
"That is essential for the generation of renewable energy and for Britain to have an industrial future in the production of onshore wind."
Ian Pearson MP, economic secretary to the Treasury said: "The £4bn of lending to the energy sector that we announced in the Budget is just part of the £10bn of lending that we hope to see coming into the UK economy from the EIB this year, nearly three times last year's total. I am pleased at the success we are having working in partnership with EIB to provide financing to this and other important sectors."
EIB vice president Simon Brooks said: "The development of the UK's wind energy capacity will support the European Union's and national targets for renewable energy generation. As well as helping to reduce greenhouse gasses it will strengthen the security of energy supplies. This initiative underlines the EIB's long involvement, as the EU's financing arm, in the UK's energy sector and reinforces efforts to reduce the impact of climate change".
Photo: Copyright AMEC Border Wind