Interview with Gracher: Wind energy industry "clearly picking up speed"

Please, start by giving us a brief introduction to your company. How long have you been in business, what exactly do you offer, how many people do you employ?

Carl E. Hoestermann: The company Gracher Kredit- & Kautionsmakler GmbH & Co. KG was founded in 2000 by Alfons-Maria Gracher in Trier, Germany, as a specialist broker for the surety insurance sector, i.e. the surety business of insurance groups, and has been firmly established in the market for over two decades. We are by far Germany's largest surety broker with a market share of well over 50 %. In addition, we have integrated specialists for credit insurance, factoring and corporate financing. Our team currently comprises more than 60 employees and is constantly growing.

Gracher is a credit and surety broker. What exactly does that mean? What does your business look like?

Kai Grove (see image left): Basically, we support companies in expanding and optimising their own financing and hedging important risks. With our network, we have an overview of providers and their conditions and can advise and accompany clients in finding the right solution for their situation. Our four main areas of guarantee insurance, credit insurance, factoring and debt advisory cover different areas, but can also be combined with each other:

Surety insurance is a very flexible alternative to the classic bank guarantee, which is still used far too seldom. Its great advantage is that our clients can spare their bank lines and keep the necessary cash liquidity free, because unlike the bank guarantee, the guarantee insurance does not "cannibalise" the bank capacities. And: Insurers often accept credit ratings that the banks no longer want to carry. Both are very valuable for many companies in these times.

Credit insurance, in turn, helps to protect against expensive risks such as high payment defaults or political imponderables.

With our factoring offer, we provide an established financing alternative in which not primarily one's own creditworthiness is decisive, but the quality of the customers. This can give a company additional financing leeway.

And our Corporate Finance team provides support with overdraft facilities, private debt or mezzanine; these are often very specialised financing providers, but can be very relevant in a special situation, for example.

What solutions do you offer specifically for the wind energy industry?

Kai Grove: Wind energy, like the entire energy sector, is known to be very investment and capital intensive. Accordingly, risks have to be hedged and financial leeway created: This begins with the investment in new wind turbines and does not end with securing purchase commitments for wind farm operators. For wind energy companies, therefore, both guarantees and credit insurance are often relevant: With guarantees, they give clients the security that they will also receive the services that have been promised - and that over the entire contract performance period. And with credit insurance they can protect themselves against risks so that they themselves do not get into difficulties if a supplier or customer does not keep promises. And in some cases, our other financing components may also become relevant. With our 360° consulting approach, we have an overview of the overall situation and can coordinate the necessary, sensible components accordingly. Since we have had several renowned companies from the wind energy sector among our clients for years, we know exactly what the special challenges of this industry are.

Where do you see the greatest development opportunities in the market?

Carl E. Hoestermann (see image right): The realisation by politicians and society that not enough has been done so far to counter climate change and the unspeakable war in Ukraine, which has recently made the one-sided dependence on fossil raw materials transparent once again, will increase the overall pressure to act even more quickly and consistently in this area. Renewable energies are a possible and important (partial) solution to this realisation in order to counteract the current dependencies. With the expansion of renewable energies and the resulting increase in orders and cash flows, there are in turn new opportunities for research and development. We see a still young industry that is now clearly picking up speed overall and faces great potential in the coming years. We would like to actively support and successfully accompany this development with our diverse financial and other advisory services.

You are internationally positioned, your customers come from all over the world. What impact does the war in Ukraine have on your company?

Carl E. Hoestermann: We are indeed very internationally positioned, in addition to numerous locations within Germany, we are represented by branches in Bulgaria and the Netherlands as well as in the UK. We also have an office in Austria. But we also look after customers in their respective overseas activities, e.g. the USA, with large guarantee capacities. The war has no direct impact on us as a company, but on our clients and also on the insurers to be supplied. However, indirect effects on our company cannot be completely ruled out if the terrible war continues. Now it is first of all a matter of providing advice to the customers directly affected by this war in the respective situation and to realise fast, flexible and appropriate solutions for them in order to be able to get through the current crisis safely.

Carl E. Hoestermann is Managing Director and Attorney-at-Law at Gracher Kredit- & Kautionsmakler GmbH & Co. KG (image credit: Andreina Francese-Thomas, Gracher).

Kai Grove is Senior Specialist Surety at Gracher Kredit- und Kautionsmakler GmbH & Co. KG in the north of Germany (image credit: Gracher).