Spanish winds
Spanish equity fund Taiga Mistral is ready to invest €250 million to develop 250 megawatts worth of wind farms in Poland, nearly doubling to the 276 megawatts of wind energy generated in Poland today. To get a picture of the investment, WBJ sat down to talk with the company's managing director, Mikel Garay
Konrad Kiedrzyński: How advanced is your investment right now?
Mikel Garay: Our company was established at the end of 2007 and aims to do a lot on the Polish wind energy market. We have collected €76 [zł.260] million for investment in wind farms exclusively in Poland over the next four years. We can assure that we'll invest about €250 million [zł.855 million] in those projects.
As we are a brand new company, we are now looking to acquire projects from developers. We have already acquired a 26-megawatt project - this is our first project, and consists of 13 turbines of two megawatts each, to be located in the north of Poland, near Gdynia, and will cost approximately €40 [zł.135] million. All permits will come this year, and we plan to start construction in 2009.
How is your investment going to be financed?
Banks will finance 75 to 80 percent of the investment costs. The rest we will finance ourselves. Project finance is the way to proceed and, due to the maturity of the technology and the stability of the Polish legal framework, banks are very interested in this kind of project financing.
What makes Poland such a promising market for this type of Spanish investment?
Spain is one of the leading countries in the world in terms of development, construction, operation and technological research in wind energy. Therefore, we are trying to expand our activities into countries that we find interesting enough. Poland is one of these.
But the price of energy produced is still more expensive than through traditional means...
Traditional energy sources are cheaper because we do not internalize their negative effects, for example pollution. Although it is said that the one who pollutes should pay, polluters have not paid for their damages until recently. Paradoxically, they have also received many subsidies. In the meantime, the world is becoming more and more polluted in terms of CO2 emissions and nuclear waste storage. That is why renewables should play an important role in the energy mix.
Are you counting on EU support in carrying out your investments in Poland?
There are some EU grants and subsidies to be allocated in wind farm investments in Poland in the future, but due to the complexity of the bureaucracy and the lack of clear rules, nowadays we frankly do not consider them in our investment models.
Are you considering further investments in wind energy in Poland?
Once we will finalize our target - 160 MW in the following four to five years - we hope we will keep on raising money to continue with more investments in the country. We're planning to take it one step at a time.
How do you plan to cope with growing competition?
Companies from all around the world are developing and investing in renewables in Poland. Concerning price-to-cost ratio, we are getting more and more competitive all the time.
What obstacles could occur for this type of investment?
The main difficulties include bureaucracy during the process of obtaining building permits and concessions for the production of wind energy. Negotiating access to the network is also difficult - it does not allow the realization of larger projects. I mean that the administrative procedure is very complicated and, on the other hand, the lack of a solid electrical grid means that many good areas for wind energy production cannot be developed because the grid is weak or simply impossible to connect to.
