Rushing to join the wind fund business

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The German wind fund business is attracting new players almost daily, with dozens of funds being launched to satisfy demand from small time investors for the high returns available from a low risk stake in a wind project. The keys to success of the closed end funds, which are locked once the target capital is reached, lie in the fixed rates that power companies are required by law to pay for all output from wind plant -- and in the ability for investors to be limited partners, thus securing any tax advantages for themselves without incurring much risk.

According to market analyst Stefan Loipfinger, the biggest wind fund company last year was Umweltkontor Renewable Energy of Erkelenz, which successfully offered shares in wind projects for DEM 56 million. From this capital, DEM 205 million of wind plant were built -- 86 turbines with a combined installed capacity of 78.8 MW, says Umweltkontor. To date the company has launched more than 20 wind funds.

Runner-up to Umweltkontor is Deutsche Immobilien Leasing (DIL) of Düsseldorf, a division of the Deutsche Bank. It attracted DEM 48 million into its wind funds, triggering about DEM 148 million of development. In third place is WPD of Bremen, which brought in DEM 45 million through its wind funds to raise DEM 133 million of financing, Loipfinger reports. (WPD disputes this figure, saying it attracted DEM 58.8 million last year.)

A series of other wind fund companies all raised more than DEM 25 million of capital each, including Umwelt Management in Nechlin, GHF of Leer, BVT in Munich, Energiekontor in Stuhr, Engineering Büro für Energieplanung in Oldenburg, Plambeck Neue Energien in Cuxhaven and WKN Windkraft Nord of Husum.

Newcomers to the scene this year include Hamburg-based wind developer P&T Technology. It announced in May that it had founded a wind fund marketing company named European Energy Consult Holding. "It is evident from our own experience that interest in investing in wind stations is still growing," commented Umwelt Direkt Invest-Beratung (UDI) of Nürnberg in June. UDI, a subsidiary of the Berlin-based Enertrag, found investors between January and April to provide DEM 11.9 million for two wind stations at Bad Bentheim/Desloch and Bergen/Nordenham.

Market leader Umweltkontor is planning to invite investors to buy stakes in no less that ten wind funds this year, according to the company's Tim Warnke. "The next in the pipeline will be for the Borne 3/Welbsleben wind station where the total investment is EUR 16.1 million," he adds. In the spring, Umweltbank of Nürnberg secured DEM 6 million from about 270 investors within one month for the Scheddebrock wind station where five turbines came on-line in the summer. Umweltbank is now marketing a new wind fund in co-operation with WKN Windkraft Nord for the Apensen wind station near Hamburg. Investors can take stakes of a minimum of DEM 10,000 each.

Founded in 1997, Umweltbank has marketed 15 wind funds to raise money for installation of 177 wind turbines. Around 3000 customers have stakes in the wind projects amounting to nearly DEM 110 million. Last year the bank marketed two wind station funds to raise DEM 23.2 million in capital for financing 35 turbines (28.1 MW). Together the stations cost DEM 76.5 million.

In a lightning share offer, WPD Vertrieb of Bremen raised DEM 5 million from investors within the space of just two weeks in April which allowed it to raise financing for a DEM 17.25 project at Landscheide comprising four NEG Micon 1.5 MW machines installed near Brunsbüttel in June.

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