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Oceanteam: No funding for Ireland-Wales interconnector
Oceanteam has not been able to clinch financing for its planned ‘East-West’ interconnector linking the electrical grids of Great Britain and Ireland, as the Norwegian company's financial problems continue to mount.
Oceanteam, which has been buried underneath an avalanche of losses on project work at offshore wind farms over the past several months, turned in an operating loss of €35.5m ($50.3m) for the first quarter of 2009. The company lost €3.2m during the same period last year.
Through its Irish subsidiary Imera, Oceanteam planned to build a €225m electrical interconnector running 135km between Arklow, Ireland and Pentir, Wales. Though the company has long insisted the cable would be finished by 2010, it now acknowledges that it has not been able to conjure the financial backing it needs to move the project forward.
Interconnectors linking the electrical grids of various EU countries are seen as a crucial step in the development of Europe’s renewable-energy industry. With EU countries mandated to derive a certain percentage of their electricity from renewables by 2020, interconnectors will allow renewables powerhouses – from Scotland to Spain – to export green electricity to their ‘browner’ neighbours.
In April, Oceanteam announced it was abandoning all project work in the offshore renewables industry after being forced to make massive write-downs on wind farms including Rhyl Flats, Gunfleet Sands and Alpha Ventus. After swallowing the biggest quarterly loss in its history, Oceanteam now intends to focus solely on chartering its vessels and equipment for offshore work.
In reporting its first-quarter results, Oceanteam said it expects to see slowed growth in the markets for offshore renewables, offshore grids and power interconnectors, with “projects being delayed or reviewed in view of the new market circumstances”.
Oceanteam says it continues to languish beneath a “burdensome financial structure”, with a bond loan of NOK800m ($129.3m) set to mature in June 2010, and a large number of short-term creditors.
On 30 April Oceanteam announced its board had decided to stop funding its UK subsidiaries Oceanteam Power & Umbilical and Oceanteam Subsea Services.