Offshore financier Dexia set for rescue

EUROPE: Belgian bank and major financier of 1.7GW European offshore wind power Dexia is set to be bailed out by the French and Belgian governments after becoming embroiled in the Eurozone financial crisis.

by Paul Garrett 11 October 2011

The bank, whose shares were suspended after exposure to Eurozone debts, has previously closed a number of project finance deals for offshore wind. They are:

Q7 in the Netherlands, 120MW
C-Power 1, 2 and 3, 165MW
Belwind 1 in Belgium, 325MW
Boreas in the UK, 220MW
Borkum West, 400MW
Global Tech1, 400MW
Meerwind in Germany, 288MW

Dexia is tracking other offshore wind projects in the North Sea and has a pipeline of future deals there.

The rescue deal came after German chancellor Amanda Merkel and French president Nicolas Sarkozy agreed on a plan to recapitalise Europe’s crisis-hit banks.

In the Dexia deal securing borrowing of up to €90 billion, the Belgian government will provide 60.5% of guarantees, the French government 36.5% and Luxembourg 3%. The Belgian government will nationalise the bank’s retail arm at a cost of around €4 billion.

Dexia has a global credit risk exposure of around $700 billion, twice the gross domestic product of Greece.