(Bloomberg) -- It’s not yet viable to lend money to a wind farm in Europe that opts to use potentially cheaper Chinese wind turbines, according to Lisa McDermott, managing director for project and infrastructure finance, at ABN AMRO Bank NV.
While the prospect of Chinese suppliers moving into Europe could potentially cut costs for the renewable power source, it threatens to undermine incumbents like Denmark’s Vestas Wind Systems A/S and Germany’s Siemens Energy AG just as Europe tries to boost local manufacturing in the transition away from fossil fuels.
Wind farm developers in the UK have been calling McDermott to ask about the potential to use Chinese suppliers for their projects, she said at the BloombergNEF summit in London Tuesday. So far she’s given them a simple answer.
“Would I finance Chinese turbines? I’ll be honest, probably not,” she said. “The main reason is a lack of familiarity with Chinese manufacturers.”
That could change with time, McDermott said. Banks like hers would need more information, such as technical information about the machines’ performance and third-party certifications.
If lower costs are the reason for a European company’s decision to use the Chinese-made turbines, McDermott would want to know. And she’d like for investors to see some of the returns, after profits have been squeezed in recent years.
“If the answer is cost reduction, I’d say, ‘Will you share that with financing parties?,’” she said.
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