UK BANK Barclays is backing a €35 million wind farm development in Tyrone – the biggest project of its kind to get off the ground in the country this year.
The bank is providing the long-term funding to Screggagh Wind Farm to develop a generating facility at Screggagh, close to Fintona, Co Tyrone, which will have the capacity to generate up to 20 mega watts (MW) of electricity – enough to power about 10,000 homes, according to the company’s estimates.
Barclays said the development is the first new major wind farm to commence anywhere in Ireland this year, although the number of such projects to begin coming on stream here is expected to grow as a number of players, such as the Bord Gáis-owned SWS, have sizeable pipelines.
Screggagh has been going through the planning process since early last year and is expected to be completed next year, according to the company’s spokeswoman, Doreen Walker.
The loan will be used to build eight 2.5 MW wind turbines.
Energy has generally fared better than other sectors when it came to getting funding, although it has seen finance costs increase. Newer, green or alternative energy projects have seen a squeeze, but a number of banks, including Barclays and Bank of Ireland, are active and lending money to new projects.
Some European players, such as German bank, Nord LB, are said to be looking at the possibility of lending to wind farm projects in Ireland, partly because much of the hardware used in the farms is made in Germany and the manufacturers have existing relationships with these lenders.
Barclays is active in the overall energy sector, and has raised a total of €2 billion for the industry generally since it began operating here. It recently agreed to finance State agency Eirgrid’s electricity link between Ireland and Wales.
The bank provides finance to wind farm projects such as Screggagh based on their projected cash flows rather than the value of the asset themselves.
The various supports available for green energy projects put a guaranteed floor on their revenues, which gives a level of comfort to lenders and investors.
Henry Cleary, head of structured property finance for property services at Barclays Corporate, said the bank’s strong balance sheet and access to capital makes it possible to fund such projects. Niall Quinn, the bank’s head of structured finance for renewable energy financing, said the Screggagh deal demonstrates the bank’s commitment to the sector and the potential it offers.
