LONDON (Alliance News) - Infinis Energy PLC on Wednesday said it has secured financing facilities worth a total of USD51.0 million to construct two wind farms in Northumberland, England, despite the current uncertainty in the sector surrounding UK government subsidies.
The debt facilities have been arranged by Santander and will fund the construction of the Sisters 8.0 megawatt and North Steads 18.0 megawatt wind farms. The two neighbouring farms mean the company has 135.0 megawatt of capacity currently being constructed.
Both farms are expected to be operational by September 2016, and will qualify under the Renewables Obligation subsidy, which is currently under review by the UK government.
Earlier in 2015, the UK government said the cost of supporting renewable energy subsidies, including the Renewables Obligation, was set to cost around GBP9.1 billion by 2021 compared to its budget of only GBP7.1 billion, leading it to cut them to try to claw back its over-expenditure.
The Renewables Obligation was introduced in 2002, and places an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources. The subsidy will be cut sometime in 2017, meaning renewable energy companies are racing to get their projects up and running before the deadline.
"Securing project financing in the current climate of regulatory uncertainty is a real challenge for British businesses investing long-term capital as they build out renewable generation capacity. Our ability to finalise these facilities is testament to the strength of our collaborative relationship with Santander and Infinis' strong development track record," sdaid Chief Executive Eric Machiels.
"Government decisions to change the regulatory framework for onshore wind at short notice and without providing full details of those policy changes have had a significant impact on the ability of developers of renewable energy to conclude project financing agreements with lenders," he added.
"While we have successfully concluded project financing on all our projects, we call on the government to adopt a stable policy regime that supports efforts to decarbonise power generation in an affordable way, and which will prevent further damage to the independent sector," said Machiels.
Infinis shares were up 0.5% to 132.20 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.