The European Investment Bank (EIB) has opened a £700 million fund to finance eligible onshore wind projects, with a further £700 million being injected by commercial banks.
Contributions from the Royal Bank of Scotland, Lloyds Banking Group and BNP Paribas Fortis will bring the total funds available to £1.4 billion.
The loans, which would run for 15 years, will be available to eligible onshore wind projects in the UK with a project cost of between £20 million and £100 million.
Wind farms with planning permission are the target beneficiaries of the scheme.
There is currently estimated to be around 756 megawatts of wind energy projects under construction in the UK and a further 3056 megawatts with planning consent.
The move is designed to free up liquidity in the sector and secure the ongoing development of clean energy, which has stalled in the wake of the credit crunch.
Research conducted by UK-based consultancy New Energy Finance shows that while investment in wind energy on balance sheet rose to £920 million in 2009 from £212 million in 2007, project finance fell to £54 million from £336 million.
The UK is seeking to cut its carbon emissions by 80 per centÔÇöequivalent to levels in 1990ÔÇöby 2050.
Earlier this week, the UKÔÇÖs energy and climate change secretary Ed Miliband published policy statements for wind power that will help to kick-start the progress of 700 megawatts of wind projects that have currently ground to a halt in the planning system.
The plans have been welcomed by the British Wind Energy Association (BWEA). CEO Maria McCaffery commented: "Wind energy has never been a risky investment. In fact, wind farms in the UK have never defaulted on their loans.
ÔÇ£However, the recent turbulence in the financial markets has affected availability of loan finance for smaller and medium sized projects.
ÔÇ£The funds announced today will be particularly important role in bringing forward a host of sound projects, by developers with a proven track record in wind energy delivery," she added.
McCaffery went on to observe that she saw no reason why the UK's wind energy sector should not be as successful as those of other European countries, particularly given the countryÔÇÖs wind resources.
ÔÇ£We now need a bold strategy to resolve planning, so that we can make good on our promise to deliver 15 per cent of energy from renewables by 2020,"┬áshe concluded.
Ed Miliband will soon be hosting a forum alongside UK chancellor Alistair Darling that will allow wind farm developers and the banks to start brokering the deals.
*        *        *
