How much equity does a wind farm project need?

Typically 20 to 30 percent. The rest is covered by banks through project finance (non-recourse), in which the plant's future electricity revenues serve as the main security. Community-wind (Bürgerwind) tranches, mezzanine capital or bonds are complementary building blocks.

Which banks finance wind farms?

Specialised banks with project-finance experience — KfW (particularly KfW 270), the Sparkassen and cooperative banking network, UmweltBank, Triodos, DKB, GLS, plus some insurers and credit funds. Syndicates are common, with several institutions sharing the volume.

Guide · Financing

How is a wind farm financed?

In short: Conventionally through project finance — roughly 20–30% equity, 70–80% debt from the banking market, terms usually 12–15 years, repayment from electricity revenues. The plant itself (not the developer) bears most of the liability — which is why the financing stands or falls with a robust cash-flow model.

The typical capital structure

Block	Share
Equity (project company / sponsors)	20–30%
Senior debt (bank syndicate)	60–75%
Mezzanine / subordinated (optional)	0–10%
Community-wind (Bürgerwind) tranche (cooperative / savings bond)	0–15%

Equity comes from the developer, from municipal utilities/energy suppliers or infrastructure funds. A community-wind (Bürgerwind) tranche strengthens local acceptance (see community participation) and can replace equity or debt.

Who provides financing in Germany

KfW — programme 270 "Erneuerbare Energien Standard" (Renewable Energies Standard) as refinancing for house banks, attractive interest rates.
Sparkassen and DZ network and Landesbanken (regional state banks) — the largest volumes overall.
Sustainability-focused banks — UmweltBank, Triodos, GLS, EthikBank, DKB.
Insurers / credit funds — on larger tickets as direct investors or via Schuldscheine (promissory note loans).

For larger volumes (from ~EUR 50 million) several banks form a syndicate, with one acting as lead arranger and representing the group.

Securities — what the bank requires

Cash-flow model with conservative wind/electricity-price assumptions (P50/P90 scenarios).
EEG market premium or PPA as revenue protection — see market premium and PPA.
BImSchG permit (Federal Immission Control Act permit) legally final.
Maintenance/service contract with the manufacturer or an ISP (independent service provider).
Insurance package (machinery breakdown, business interruption).
DSCR (debt service coverage ratio) at least ~1.2–1.3 across all years.

Repowering has a financing advantage

With repowering, the site, grid connection and local acceptance are already established — this significantly lowers the project risk compared with a greenfield. Banks often reward this with better conditions. The expected additional yield can be roughly estimated with the repowering IRR calculator.

Order in practice: first the BImSchG permit + EEG award (or a binding PPA), then the financing request. Banks want to see the revenue side as robust before they issue a term sheet.

Frequently asked questions

How long does project finance run?

Typically 12–15 years, often with a cash sweep after the EEG remuneration expires. The plant's technical service life significantly exceeds this term.

What does the debt cost?

Variable — market rate + risk premium (margin), with project finance usually in the low single-digit percentage range plus arrangement fees. Exact conditions depend on the market environment and creditworthiness.

Can I use community wind and a bank at the same time?

Yes, that is in fact common. The community-wind (Bürgerwind) tranche enters as subordinated equity — the bank accepts it as "quasi-equity", which improves the leverage effect.

Wind farm financing capital structure: 20-30 percent equity, 60-75 percent senior debt bank syndicate, 0-10 percent mezzanine subordinated, 0-15 percent community-wind tranche. Lenders: KfW programme 270, Sparkassen and DZ network, sustainability banks UmweltBank Triodos GLS DKB, insurers and credit funds from EUR 50 million. Securities: cash-flow model P50 P90, EEG market premium or PPA, BImSchG legally final, maintenance contract, insurance package, DSCR 1.2-1.3. Repowering advantage: lower risk, better conditions. Term 12-15 years

Wind farm financing – capital structure, lenders and security requirements