"The REG Entwicklung fund is one of the financially strongest development companies on the German market," claims the company, a strategic partnership between financier Bobikiewicz & Partner and Daimler Benz Aerospace (DASA). It specialises in securing siting permission and finance and then selling turnkey wind projects to their eventual operators (Windpower Monthly, July 1998).
All the sites selected by REG Entwicklung are earmarked for wind development in local structure plans. In Lower Saxony in the district of Emsland, a building permit has been secured for 13 turbines at Neudersum, while negotiations are continuing for a further three machines to give a total site capacity of 22 MW. REG Entwicklung hopes to bundle this site with two others nearby for which it is seeking building licences. At Borsum it is negotiating to develop 13 turbines for a total generating capacity of 19.5 MW, and at Rhede talks are proceeding for 22 machines for 33 MW. Power from all three locations will be fed into a single new transformer station, the largest yet built in German specifically to serve wind power stations, says Bobikiewicz. It will take about a year to build.
The North Rhine Westfalia sites, previously in the hands of DASA, at Driftsethe, Sandstedt and Wittstedt, are suitable for five to seven turbines each, according to the company.
The REG Entwicklung wind fund was closed in November, but since then another three projects in Lower Saxony have been squeezed into the portfolio: at Beverstedt (11 turbines), Kirchwistedt (nine turbines) and Nordenham (five turbines).
Secret to success
The key to success so far, says Bobikiewicz, is the speed with which the company has managed to get sites earmarked for wind development in local structure plans. A wind operating company is set up for each site in which REG Entwicklung and other investors buy shares. When a site is developed, REG Entwicklung pulls out of the operating company by seeking new investors to buy its shares. "REG Entwicklung investors can therefore look forward to interesting capital returns within the next two to three years," says Bobikiewicz.
While REG investors will benefit from tax write-offs for 75% of invested capital in 1998, the fiscal regime will not be so lucrative in the future. Until now income from sales of company stakeholdings has been taxed at half the normal rate in Germany. REG Entwicklung had expected to benefit from this when selling its shares in the wind operating companies, but the new German government is expected to abolish the tax break at the beginning of 1999. The company's Jörg Bold stresses that the tax privilege is not critical to the success of REG Entwicklung. "Its just the cream on the cake," he says.