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Germany

Germany

Going professional in Germany

The march of commercial wind power investors into Germany is set to continue unabated now that the country's traditional vehicle for citizen ownership of wind plant -- the closed-end wind fund -- has been definitively killed off by government. The attraction of wind fund investment for private individuals lay in being able to offset net operating costs against tax. But one of the first acts of Germany's new government was to pass a long awaited tax law amendment on November 24 axing fiscal incentives on a range of investment funds.

Annual operating losses may now only be set against later income from within the fund itself. Despite protests, the date the law takes effect is to be backdated to November 11, 2005.

The change had long been expected and makes more wind projects available to commercial and institutional investors (Windpower Monthly, June 2006). Plambeck Neue Energien stopped selling shares in closed-end funds at the end of 2004, saying it "now sells all its wind stations directly to large German and foreign investors focused on earnings performance."

Wind farm sales by other developers in recent months confirm the trend. In September, WKN Windkraft Nord sold a 14 MW wind farm, to be installed in Brandenburg before the end of the year, to Difko, a Danish investment company with a long history in the international wind industry. EAB Technology Group sold a 55 MW project at Alsleben in Saxony-Anhalt to GE Energy Financial Services, while turbine manufacturer Nordex sold a 22.5 MW plant installed in the north Eifel region in North Rhine Westfalia to global investment company Babcock & Brown. The sale in July by MVV Energie subsidiary, Eternegy, of project sites for more than 100 MW of wind capacity to Spanish utility Iberdrola was also a powerful indicator of changing times. In the same month, turbine manufacturer Repower Systems and wind developer Denker & Wulf sold five wind stations totalling 99 MW, also to GE Energy Financial Services.

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