Sweden

Sweden

Bankruptcy blamed on permit delays -- Swedish collapse

Months of financial problems for Swedish wind power developer Renewable Energy ended with the company's collapse last month. It filed for bankruptcy on October 11 after repeated failures to raise sufficient funds to keep it afloat. Renewable Energy's ten employees have been fired and uncertainty now clouds the future of the company's pipeline of 20 or so largely small projects.

Insolvency administrator Leif Ljungholm says the projects will be put up for sale. The largest is a 10.2 MW wind plant near Gdansk, Poland, comprising 17 Enercon 600 kW turbines from Germany. According to Ljungholm, the project is almost ready to start and several investors in Sweden have expressed interest in acquiring it. Ljungholm set a deadline of October 31 for prospective buyers to submit offers for the Polish activities. Many of Renewable Energy's other projects are at the planning stage and a number of them may never be realised. Lennart Blomgren, chairman of the Swedish wind power association, says the bankruptcy highlights the structural difficulties facing the country's wind power producers.

"The real problem is that it takes far too long to obtain planning permission for projects," he says. "While projects are in the pipeline companies have costs but no income, which can end up consuming their entire share capital. That seems to be what has happened to Renewable Energy."

Blomgren says the approval process for large wind plants in Sweden often takes four to five years, while for smaller projects the timeframe is two to three years. In many cases, arduous planning regulations are compounded by lengthy appeals processes.

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