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Bluewater Wind project OK for now; Plenty of time to line up financing, experts say

The Bluewater offshore wind farm project's future remains tied to the search for an investor, and does not sink or swim with the fate of Babcock & Brown Ltd., its publicly traded parent company, the company and observers said. On Friday, bankers took control of Babcock & Brown Ltd., after investors voted down a plan to restructure the company's debt. The development further focused attention on the viability of the Bluewater Wind project here.

The Bluewater offshore wind farm project's future remains tied to the search for an investor, and does not sink or swim with the fate of Babcock & Brown Ltd., its publicly traded parent company, the company and observers said.

On Friday, bankers took control of Babcock & Brown Ltd., after investors voted down a plan to restructure the company's debt. The development further focused attention on the viability of the Bluewater Wind project here.

Company executives and analysts said the demise of the Australian holding company changes little for the Bluewater plan.

"The parent company was dead anyway," said Brian Yerger, president and CEO of ARDA Advisors, a new Delaware-based renewable energy research and consulting company. "They took the plug out."

"Essentially, what Bluewater needs is a bridge to the financial institutions that can raise this kind of money. That sounds like it's still intact," Yerger said.

Bluewater signed a hard-won contract with Delmarva Power in June to provide up to 200 megawatts of power in any given hour -- enough to power 50,000 homes -- from about 66 turbines off the coast near Rehoboth Beach.

Babcock was supposed to provide the $800 million... more [truncated due to possible copyright]  

The Bluewater offshore wind farm project's future remains tied to the search for an investor, and does not sink or swim with the fate of Babcock & Brown Ltd., its publicly traded parent company, the company and observers said.

On Friday, bankers took control of Babcock & Brown Ltd., after investors voted down a plan to restructure the company's debt. The development further focused attention on the viability of the Bluewater Wind project here.

Company executives and analysts said the demise of the Australian holding company changes little for the Bluewater plan.

"The parent company was dead anyway," said Brian Yerger, president and CEO of ARDA Advisors, a new Delaware-based renewable energy research and consulting company. "They took the plug out."

"Essentially, what Bluewater needs is a bridge to the financial institutions that can raise this kind of money. That sounds like it's still intact," Yerger said.

Bluewater signed a hard-won contract with Delmarva Power in June to provide up to 200 megawatts of power in any given hour -- enough to power 50,000 homes -- from about 66 turbines off the coast near Rehoboth Beach.

Babcock was supposed to provide the $800 million project's financial backing, but the global credit crisis devastated Babcock, which was heavily burdened with debt.

The Financial Times reported that the company had "collapsed into bankruptcy."

But in an interview Tuesday, New York-based Babcock spokesman Matt Dallas emphasized that the Bluewater project is owned by a separate arm of the company, Babcock & Brown International.

Babcock International, also burdened with debt, is being sold off over a two- to three-year period. It had assets valued at $14 billion in June. Babcock Ltd. reportedly has an asset value of only about $10 million.

"The company's still operating, still moving, we're still doing development," Dallas said.

Babcock Ltd. is the legal controlling shareholder of Babcock International, but would face legal hurdles to getting at the subsidiary's capital, it was reported.

Financial observers say the key question for Bluewater is whether it can line up investors for the Delaware project in a tight credit market.

Bluewater's schedule calls for the wind farm to be built in 2012 and the firm has until summer 2010 to cancel the project without paying a $6 million penalty to Delmarva. The company's biggest expense would be the giant turbines that would generate electricity and those wouldn't be purchased until closer to the start of construction.

Jeremy Firestone, a University of Delaware associate professor, said the contract with Delmarva has value and he remains confident that Bluewater will find a buyer when credit eases up.

"I would say this doesn't tell us anything else," Firestone said. "This seems to be more reflective of the financial chaos in general with the investment firms in large banks, insurers, all of that stuff, than it tells us anything more about Bluewater."

Yerger said Bluewater will benefit from being a part of a large global company with global connections -- "a Rolodex worldwide of large financiers, large banks" -- that will come in handy when credit eases.

Other news Tuesday broke in Bluewater's favor, as two federal agencies declared a truce over how they will regulate offshore renewable energy projects.

The Department of the Interior and the Federal Energy Regulatory Commission, which had been arguing over which would take the lead, decided that Interior will govern offshore wind, and the FERC will regulate tidal wave power.


Source: http://www.delawareonline.c...

MAR 18 2009
https://www.windaction.org/posts/19459-bluewater-wind-project-ok-for-now-plenty-of-time-to-line-up-financing-experts-say
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