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GE finance ready to provide equity to renewable projects as soon as …

Alexander Richter 24 Jun 2009

GE Finance ready to provide financing to renewable projects as soon as "the U.S. government decides on rules for new grants" and "new rules from the Department of Energy (DOE) on how it will release more than US$ 48 billion in loan guarantees.", so a recent article on Reuters.

… as soon as “the U.S. government decides on rules for new grants” and “new rules from the Department of Energy (DOE) on how it will release more than US$ 48 billion in loan guarantees put in place by the Obama administration.”, so a recent article by Reuters.

According to the article, “General Electric’s Energy Financial Services is working on thousands of megawatts of renewable energy projects, but is not likely to move forward until the U.S. government decides on rules for new grants.”

Those loan guarantees will change how developers of wind, solar, geothermal and hydropower projects finance their construction, which in turn will determine returns for investors such as GE’s EFS.

“In this environment, no one’s going to get (financing) approval to do anything now,” Tim Howell, head of EFS’ power and renewable energy business, told Reuters in an interview.

EFS has $4 billion to spend on new energy projects, including renewables and conventional power plants, such as gas-fired generation, he said.

The company will be able to move more quickly with its equity investments than banks using debt financing for projects, he said. Debt financing typically takes at least two months to put in place.

Still, with the turbulence in the financial markets, Howell said there was not likely to be a flood of new renewable projects announced once the government’s rules were released.

“I don’t think that there is the capacity in debt or equity markets to to just turn this on like a spigot,” he said.”

The article continues talking about some of the investments made by GE Finance, none of them seems to be geothermal, but with the right persuasion even this equity player might consider providing the industry with much needed equity investments.

Source: Reuters