MUFG EMEA has today published a new whitepaper examining the structural constraints on commercial bank lending which risk undermining Europe's offshore wind recovery. As the sector enters its most ambitious growth phase to date, UKSIF estimates the UK market alone will require more than £155bn in private investment between 2024 and 2030 to reach the 50GW target [1].
The paper, titled “Competition for Capital: Financing Europe's Offshore Wind at Scale," identifies the market and financial challenges constraining Europe's offshore wind expansion, and presents the funding models that could be most effective to unlock the sector as a European catalyst for energy security and economic growth.
The challenge
Developers' financial assumptions in the early 2020s proved, in retrospect, too optimistic. A series of disruptions since 2022 have slowed offshore wind's trajectory. Rising inflation, higher interest rates, grid connection shortages, strained supply chains, geopolitical tensions, and unfavourable policy, all contributed to project delays and cancellations, with Wind Europe reporting a 32% drop in new offshore wind installations in 2024 compared to 2023. [2] Across the UK and EU, progress toward 2030 targets has further slowed against a backdrop of failed subsidy auctions, and developer uncertainty.
Course correction and financing opportunity
Signs of recovery are now building but considerably more investment will be needed to achieve the EU's 99GW target by 2030. Recalibrated auction parameters, stronger policy frameworks, and a focus on bankable projects that mitigate delivery risk are bringing developers back to the table. Energy security concerns continue to reinforce the strategic value of offshore wind to governments across the region.
As offshore wind's debt requirements grow in scale and complexity, the financing model must evolve to keep pace. Basel IV has reshaped how banks allocate capital across long-term infrastructure lending, and competition for bank capacity from other asset classes, including data centres, is increasing. Broadening the sources of capital available to the sector is therefore a strategic priority.
MUFG is responding directly to the challenge by proposing solutions that include structuring multi-tranche debt matched to investor appetite, maximising Export Credit Agency participation, mobilising public-sector anchors, and bringing in institutional investors and capital markets, as well as bringing forward refinancing considerations into initial debt financing discussions.
Stephen Jennings, Chief Sustainability Officer at MUFG EMEA, said:
“MUFG has a strong track record in supporting the offshore wind sector, and with wider calls for energy security across Europe, believe that banks must play a critical role in financing this growth market.
“Offshore wind is attracting growing investor interest, but meeting 2030 targets will require more than incremental adjustments to how projects are financed. Diversifying the investor base, bringing in institutional capital alongside bank debt at the right point in the capital structure, is what closes the financing gap and delivers the liquidity the sector needs."
Download the full report here
[1] UK Sustainable Investment and Finance Association, 'Written evidence submitted by the UK Sustainable Investment and Finance Association (UKSIF) (GRI0121)', February 2024
[2] WindEurope, 'Wind energy in Europe: 2024 Statistics and the outlook for 2025-2030', February 2025; 'Wind energy in Europe: 2023 Statistics and the outlook for 2024-2030', February 2024