In 2009, Meridian Energy Limited in New Zealand ordered 28 wind turbines from Siemens Wind Power in Denmark and started looking for viable financing for the acquisition.
Meridian has previously financed wind plants through bond loans, the drawback being that these loans have to be repaid in a single instalment as soon as the loan expires.
Instead, Meridian was now looking for an alternative type of financing based on repayment in instalments over the term of the project. This would allow the loan to be repaid as the revenue from the project's sales of energy started to roll in.
It typically takes between 10-15 years to recoup an investment in a wind farm. Owing to the financial crisis, Meridian's bank, ANZ Bank, was only able to offer a loan with a 5-year repayment term.
“Meridian had access to traditional forms of finance but recognised the opportunity EKF provided due to the Siemens supply contract to diversify its funding sources and extend the average maturity of its debt profile,” says Andrew Lawson, director for Structured Asset & Export Finance, Specialised Lending, at ANZ.