Frost & Sullivan: Banking on Europe's Offshore Wind Industry

LONDON, January 21 - The offshore wind industry has already garnered government support and is
increasingly piquing the interest of the private sector thanks to its ability
to contribute significantly to the European renewable energy targets of 2020.
As installed capacity continues to grow, and market share increases, the
banking sector will continue to become progressively more involved in this
industry.

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The offshore wind industry is expected to grow in relation to its bigger
counterpart, onshore wind. While onshore wind will always occupy a major
share of the wind energy market, offshore wind will become a more substantial
contributor of electricity generated from wind by 2020. According to Frost &
Sullivan estimates, installed capacity of offshore wind is expected to grow
from 1.3 MW in 2008 to 18.8 MW by 2015.

"The banking sector's interest in the offshore wind industry has been
accelerating rapidly in the past year and more so since the second half of
2009, and is expected to continue to grow stronger in the coming years,"
estimates Frost & Sullivan's Industry Analyst Gouri Kumar. This interest can
be attributed to two primary factors: the irrefutable size, potential and
opportunity that the industry presents, and the pre-existing involvement of
both government and investment banks in efforts to rescue some of the most
important projects last year.

Bank involvement in the European offshore wind industry is a relatively
new phenomenon. In the past, very few banks were involved in this industry as
the risk factor was relatively high in comparison with the more mature
onshore wind sector. Among inherent risks were: a lengthy permitting process,
wind turbines placed in very harsh environments, higher project economics and
more expensive O&M procedures. However, this risk is abating as countries
like the UK and Germany spearhead efforts to reduce costs related to turbine
technology and various components as well as easier installation methods and
better accessibility.

Importantly, the offshore wind industry requires a significantly greater
financial risk and investment involvement than onshore wind farms, making it
potentially difficult and risky for one bank to bear the entire burden. As a
result, banks partner with other banks, adding to the complexity of the
deals. "Involvement by a smaller number of banks historically means that
there is less experience in the industry financing offshore wind when
compared with onshore wind," says Kumar.

Nevertheless, investment in this industry is growing because financial
investors, mostly investment banks, are willing to assume major risks in
order to capitalise on lucrative opportunities inherent in this industry.
"Investors are trying to overcome these risks with innovative approaches and
out-of-the-box thinking," Kumar concludes.

To learn more about the Offshore Wind Energy Market and for a
complimentary brochure please email Chiara Carella at
chiara.carella@frost.com with the following information: your full name,
company name, title, telephone number, e-mail, address, city, and country.

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    Contact:
    Chiara Carella
    Corporate Communications - Europe
    P: +44-(0)-20-7343-8314
    M: + 44-(0)-753-3017689
    E: chiara.carella@frost.com

    www.frost.com

Chiara Carella, Corporate Communications - Europe of Frost & Sullivan, + 44-(0)-20-7343-8314, Mobile, +44-(0)-753-3017689, chiara.carella at frost.com