Sept. 28 (Bloomberg) -- Eksport Kredit Fonden is seeking to extend a 20 billion-kroner ($3.7 billion) loan program that plugs a gap in the market left by the financial crisis for long- term loans required by clean energy projects.
“It’s not possible to get tenures that long in the private market, or it is very hard,” because of the banking crisis that began in 2008, Anette Eberhard, who heads the Danish state export credit agency, said in an interview.
Under the program, Copenhagen-based EKF can lend on terms as long as 18 years at market rates with most of the loans issued so far going to renewable energy projects that are capital-intensive and require longer payback times, she said.
The Danish government created the export loan program in 2009, supplying the EKF with 20 billion kroner to help foreign companies unable to secure longer-term loans from banks reluctant to lend in the crisis to buy Danish goods such as wind turbines made by Vestas Wind Systems A/S.
The EKF lends to commercial banks that add their own fees and distribute funds to the borrower. The EKF also requires an export guarantee for the loan. The government planned to extend the program that is due to expire at the end of this year in May to 2015 on continued demand.
Since then, Denmark’s Social Democrat-led opposition bloc defeated the Liberal-Conservative government and its allies. Social Democrat leader Helle Thorning Schmidt has yet to conclude three-party negotiations for a new government.
The Danish newspaper Berlingske reported that talks to form the government may be completed today. “I’m pretty sure that if we run out of money, we will be able to ask the politicians for a larger amount of money,” Eberhard said.
Macarthur Wind Farm
The EKF already issued seven loans worth 6.7 billion kroner under the initiative. In addition, it has approved at least 15 applications worth about 10 billion kroner. Of those, it expects to issue three in the next six months.
“Regardless of the specific makeup of Denmark’s new coalition government, there is generally strong support from the politicians to prolong this program because we still see great demand,’ Eberhard said.
The EKF supplied a 2.1 billion-kroner facility to Meridian Energy Ltd., the New Zealand renewable electricity generator, and Melbourne-based electricity supplier AGL Energy Ltd. That enabled a 1 billion-kroner contract with Vestas for 140 turbines for the 420-megawatt Macarthur wind farm that Meridian and AGL are developing in Victoria, Australia, according to a statement on EKF’s website.
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