The 2019 expiration of the Investment Tax Credit is unlikely to put the dampers on a US offshore wind sector that looks set to take off.

TXF last week held its annual Cape Town Conference on southern African Commodities, Export & Project Financing. Here, Jonathan Bell highlights some of the key takeaways from the event and some further recent important major project developments.

Offshore wind projects are getting bigger, costs are getting cheaper, the lending market is more diversified and even the seminal corporate PPA market is picking up. But as demand for lending rises, the sector faces some major financing challenges over risk allocation and liquidity – the answers to which are already being formulated.

From Asia to the US, Kexim has a number of large-scale oil and gas projects in the pipeline. But after years of cancelled projects, as the liquid Korean ECA flexes its muscles again and increases exposures, sponsors are squeezing the ECA and lenders on pricing.

With stringent regulation and increasingly complex transactions pitched against borrowers’ expectations for rapid decision making, the pressures on due diligence are at an all-time high. Matt Reed, Associate Director at RedRidge Diligence Services, discusses the latest trends in how capital providers in the trade and project finance space are managing these pressures.