Popular fund for small wind runs dry -- Financing help

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Over a third of the 800 MW of wind capacity in France broke ground thanks to the support of France's Environment and Energy Efficiency Investment Fund (FIDEME), which focuses on facilitating small-scale initiatives. But the fund, which has supported 21 wind projects with a total capacity of 277 MW, has now run dry. The fund's manager, IXIS Environment and Infrastructures, is calling for more.

Typical of FIDEME projects is a recently completed 12 MW installation of Vestas 2 MW turbines, inaugurated at Bonneval, in the Eure-et-Loire département of northern France in March. It is the first wind project by Zéphyr Energies Renouvelables, a 50-50 partnership between a French agricultural consultancy and Germany's Planungsbüro Windenergie Rübsamen. Of the EUR 13.4 million cost, the owners -- a group of local investors -- put up EUR 2 million and secured a bank loan of EUR 10.1 million. To close the finance, they were awarded a FIDEME loan of up to EUR 1.8 million.

The fund was set up in 2003 by national energy agency ADEME and IXIS CIB, an investment bank owned by the French banking group Caisse d'Epargne, to help France meet its renewable energy targets. While FIDEME also covers hydro, geothermal and biomass, the vast majority of the 24 projects retained so far are in the wind sector.

The EUR 45 million fund comprised two shares: ADEME contributed EUR 15 million, while EUR 30 million came from various European banks and financial institutions, including Caisse d'Epargne and Banque Populaire in France and Italy's MPS Banca per l'Impresa. This money has now been fully committed and IXIS is calling for a further EUR 30 million.

Due to budget constraints, ADEME will not contribute this time. Instead, the other investors will be invited to increase their stakes. If that fails to reach the target, IXIS will approach other banks which have already expressed an interest.

FIDEME helps mainly small and medium size companies, which have no recourse to corporate finance, to bring renewable energy projects to fruition. To qualify, applicants must show they cannot secure funding through other means. The project must also use tried and tested technology and the promoter must stump up at least 10-20% of total costs.

ADEME evaluates the project according to various environmental criteria, its consistency with national energy policy and the promoter's ability to complete it. Successful applicants are granted a loan of up to EUR 2.25 million or 25% of the project cost, on which interest is charged at around 7%, depending on current market rates and the margins required by investors. Jérôme Alméras of IXIS Environment and Infrastructures, says the portfolio is performing better than forecast. "No clients have defaulted on payments," he says.


Alméras says FIDEME places a lot of emphasis on supporting personal initiatives, such as the 12 MW Bonneval plant. The developer, Zephyr, has a further 42 MW at an advanced stage of development in the Manche and Loire-Atlantique départements. Other projects which have benefited from FIDEME funding include St-Crépin (9 MW), developed by Française d'Eoliennes and Les Hautes des Ailes, at 32 MW an exception to the fund's primary focus on small initiatives. It was developed by owner-operator Erelia (Windpower Monthly, November 2005). FIDEME is also helping finance part of Ostwind's 140 MW Fruges development (Windpower Monthly, January 2006).

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