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Even as the global financial meltdown sends shudders through the German financial sector, wind developer Plambeck Neue Energien has secured EUR 60 million in loans from major lender Commerzbank for 46 MW of new capacity-a sign of continued support for German wind, despite the credit crunch and of the role debt still plays in the sector, says the company.

The loans are for Plambeck's 36 MW Buchholz and 10 MW Schwienau II wind farms in Lower Saxony and Brandenburg. They were secured at the end of 2008 and cover the entire debt for both projects. Construction has started at the sites and the wind farms will be complete in the first half of 2009, says Plambeck.

"The successful financing shows that wind farm projects, with their long term securing of yields, are among the particularly secure investments and that this is still being recognised -- not only by investors, but also by the banks," says Plambeck's Roland Stanze. The company declines to reveal the total cost of the two wind stations, but Plambeck's Rainer Heinsohn says a debt-to-equity ratio of roughly 70 to 30 applies.

In a change in the structure of the German wind market, which has traditionally relied on cheap project loans provided by state-owned development bank Kreditanstalt für Wiederaufbau (KfW), Plambeck's projects are too large for KfW to provide the debt. Starting in 2009, the bank has imposed a ceiling of EUR 10 million per project, though only infrequently has it lent more than that, says the bank's Charis Pöthig. The federal environment ministry has said this cap may be raised to EUR 50 million.

Inexpensive finance from KfW has buffered the German wind market against the global downturn. As a state-owned bank with top credit rating, KfW can procure and lend money at low interest rates. For wind projects, they currently lie in the 4.38-7.44% range for the first ten years of a 20 year loan, depending on the ratio of debt to equity, putting them at the lower end of commercial debt rates. Nearly all wind development in Germany has been bankrolled by KfW. Of the 1625 MW of wind plant that went up in Germany in 2007, KfW covered the entire debt requirement, amounting to 70% of the total EUR 1.74 billion invested in new projects, says the bank.

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