Financial planning

Financial planning

Wind power is a highly investment-intensive method of electricity production; a large share of the costs during project life cycle is committed in the investment phase.  Therefore, the success of the project often depends on financing arrangements because financial expenses have a significant impact on production costs. In wind power, financial expenses may correspond to up to 40 per cent of the production costs of the project. A longer loan period and lower interest rates will reduce the costs of wind power production.

In addition to the company form, project funding is strongly affected by the fact whether the project receives financial aid from the state, whether the producer sells all electricity to the electricity market or whether the producer has drawn up a long-term power purchase agreement (PPA) with the electricity user in order to ensure a steady flow of income for the entire life cycle of the turbine.

Wind power without subsidies

Previously, wind power construction in Finland has been supported through feed-in tariff granted by the state, as well as with competitive tendering of renewable energy. However, since 2018, wind power in Finland has also been built on market terms, i.e. without state subsidies. The majority of wind power capacity built in Finland in 2020-2022 has been built on the basis of a PPA agreement or the Mankala principle. Since 2020, new projects have not been offered financial support, and projects are built completely on market terms. The majority of wind power capacity built in Finland by the end of 2022 has had no financial support for its construction.


The Mankala principle is based on the idea that major electricity users share the ownership of production plants and are offered energy produced by these plants at a certain price, which may be lower or higher than the market price, depending on the market price of electricity. The parent companies behind Mankala companies are so financially sound that the projects receive funding on the basis of the wealth of the owner companies.

In Finland, the common Mankala principle or the PPA agreement make it easier to forecast the production of a project and to estimate its profitability. Steady income also makes it easier to obtain outside funding, and also to receive funding on better terms.

Any extra investments required (for the replacement of components, etc.) are taken into account already when planning the funding structure. In addition, the project owner will make financial provisions for the costs of decommissioning of structures at the end of use.