'Banks look kindly' on sector despite crunch

Published on Tuesday 19 May 2009 21:55

RENEWABLE energy companies are proving more resilient to the credit crunch than those in other sectors, an industry expert is set to tell a conference in Aberdeen.

Dane Wilkins, a director in Ernst & Young's renewable energy group, is tomorrow set to tell the All Energy conference that renewable energy projects are more likely to be funded by banks.

He said: "The renewables industry remains recession resilient compared to other sectors because of its increasingly high profile and the fact that we will still need power, despite the economic situation. Because of that, there is a lot of appetite to invest.

"This is encouraging for an industry that already supports over 3,000 jobs in Scotland and which is expected to generate an additional 10,000 in the next five years."

But Wilkins warned that, despite finance being available, the sector had still suffered a two to three-fold increase in the cost of borrowing and a tightening in lending covenants, debt agreements and the size of loan facilities available.

Wilkins, whose work has included providing commercial and structuring advice to Gillespie Investments on the development of an "energy from waste" plant in Scotland, added: "Finance is still available for well- developed projects.

"The cost of that money is more expensive now than it once was, but the banks do have capital to lend to renewable projects."

The conference, which starts today at the Aberdeen Exhibition & Conference Centre and runs for two days, will bring together delegates from across the wind, wave and tidal power industries.