Copying and distributing are prohibited without permission of the publisher
Coal-fired conundrum
19 November 2008
Germany's coal-fired power plant pipeline is extensive, politically contentious and with the change in lending environment will now have be banked via large club deals that will prove complicated to negotiate. By Michael Marray.
Having decided to phase out its nuclear power plants, Germany is in the midst of a major construction programme of new coal-fired power plants as exemplified by Trianel's Lunen project which closed earlier this year.
However, project sponsors find themselves caught between a shortage of debt capacity from project lenders and fierce protests from environmental groups who oppose the building of new-coal fired plants because of their high CO2 emission levels.
At the same time, the big utilities are understandably conservative about their balance sheets, and may feel that now is not the right time to press ahead with new plants in a controversial segment of the electricity market.
The situation is further complicated by changing European Union rules which will see a reduction in free allowances under the Emissions Trading Scheme (ETS), meaning that increased CO2 prices will need to be factored into German power prices. Meanwhile there is...
Take a free website trial to read this article. It’s easy to get a trial – just follow this link or email info@projectfinancemagazine.com.
Or, if you’re a subscriber or have an active trial, simply log in below to read the article.
Subscribe
Subscribers have unlimited access to all current and archive content. Start your
subscription today - click on the button below.
Subscribe
Free trial
Taking a free trial will give you access to the latest news and analysis, as
well as the online deals database, BenchBase. Start your free trial today.
Free Trial