Bloomberg News

Windreich Seeks $315 Million for Wind Farms, Studies IPO, Tie-Up

June 29, 2012

Windreich AG, the largest offshore wind company in Germany, needs to raise 250 million euros ($315 million) next year to fund development plans and may sell shares in an initial public offering or find a strategic partner.

Windreich is in early negotiations with two companies with oil and gas businesses, one in North America and the other in Europe, over strategic tie-ups to help finance and build a potential fleet of 1,600 turbines in the German North Sea, Chief Operating Officer Anil Srivastava said.

Utilities outside Germany seeking to access Windreich’s 8.4 gigawatts of approved parks or sites with building options that make up about a third of Germany’s offshore wind zones may also be interested in investing, Srivastava said in an interview. Founder Willi Balz would keep a majority if the company based in Wolfschlugen, southern Germany, holds an IPO, the COO said.

Windreich needs a maximum of 250 million euros to bring all its projects to a “construction-ready” stage, and cover part of the payments to suppliers, according to Srivastava. The funds would enable the company to bring one project to that stage of development every two years through 2020, he said.

Germany is turning to offshore wind after canceling nuclear power plants after Japan’s Fukushima atomic meltdown. Chancellor Angela Merkel’s government has set a target of operating 10 gigawatts of turbines at sea by 2020 to secure supplies and boost renewable power, as obliged by European Union law.

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Srivastava was appointed this week after a stint as chief executive officer of Areva SA (AREVA)’s renewables unit. His mission is to develop a model for building offshore parks using fewer contracts and companies with marine construction experience.

“If we are able to replicate deployments, then we will demystify and derisk this industry, both in perception and in reality,” he said. “Then the capital will flow.”

Windreich plans to get loans for its second project, MEG 1, by the end of the year and appointed Deutsche Bank AG to arrange finance for the 400-megawatt, 1.6 billion-euro venture.

Its first project, the 400-megawatt Global Tech 1, got 1 billion euros of finance from lenders including the European Investment Bank last year. Windreich owns 14 percent and expects the first turbines made by Areva to be commissioned this year.

Selling parks may be a way for the company, which generates revenue from its onshore wind business, to acquire more cash, Srivastava said. The company, with 161 million euros in revenue last year, plans to operate MEG 1 by 2015 and Deutsche Bucht, its third park, during 2016, with others to follow.

Windreich is interested in Poland’s plans for offshore wind in the Baltic Sea, as well as projects in Scandinavia and the U.K., diversifying from its German business, Srivastava said.

To contact the reporter responsible for this story: Sally Bakewell in London at Sbakewell1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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