BWE Advocates for Simplification of Project Prospectus Requirements for Citizen Energy Initiatives

2024-10-18

The German Wind Energy Association (BWE) has submitted its position on the Future Financing Act (ZuFinG), calling for significant revisions to the Asset Investment Act. The association is particularly focused on eliminating or simplifying the prospectus obligation for individuals involved in citizen energy projects.

"Anyone seeking public capital to fund a renewable energy facility must provide a detailed investment prospectus outlining how they plan to fulfill their obligations to investors. However, this requirement often presents a substantial bureaucratic and financial burden," said BWE President Bärbel Heidebroek. She pointed out that smaller project developers, particularly citizen energy companies, frequently struggle to meet these requirements, effectively hindering the citizen participation that political entities intend to promote. "We need to implement facilitating measures," emphasized Heidebroek.

Prospectus Obligations: A Barrier to Citizen Energy Projects

Small developers, such as municipal utilities and citizen energy companies, rely heavily on investor capital to fund renewable energy initiatives. However, the administrative and financial requirements tied to the prospectus obligation often create significant barriers to raising this capital.

"These stringent requirements create major challenges in offering shares in citizen energy projects, which are key to the energy transition—bringing local acceptance, community involvement, and energy independence. With minor amendments to the Asset Investment Act, we could remove these barriers and encourage more citizen energy projects," said Heidebroek.

Proposed Changes to Support Citizen Energy

To support these goals, BWE has proposed several key changes:

  1. Increase the Selling Price Limit: BWE recommends raising the annual selling price limit for shares from the current 100,000 Euros to 400,000 Euros. This adjustment would make it easier for smaller projects, often involving just one or two facilities, to raise capital.

  2. Exemption for Citizen Energy Companies: BWE advocates for the exemption of citizen energy companies (as per § 3 Nr. 15 EEG) from the prospectus obligation, thereby reducing administrative burdens for these smaller initiatives.

  3. Increase in Financial Issuance Volume Limit: The association also calls for raising the exemption limit for financial issuance from six million to eight million Euros per year. This increase would reflect the 30 to 40 percent rise in average project costs, ensuring that smaller projects remain feasible.

The Importance of Citizen Energy in the Energy Transition

"Citizen energy is at the heart of Germany's energy transition and remains a key driver of its expansion. Ensuring the funding of even small-scale projects is essential. We must avoid stifling these initiatives with excessive bureaucracy," added Heidebroek.

The proposed changes would not only ease the burden on citizen energy companies but also protect investors while supporting the continued growth of renewable energy projects across Germany. Simplifying the prospectus requirements could foster more local participation and accelerate the country's progress toward energy independence.

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