What Impact will the Euro Crisis have upon Romanian Wind Industry?

60-Second Interview

Mike Scholey
Continental Wind Partners

Jo-Anne Duff
Green Power Conferences
December 2011

Mike Scholey, CEO of Continental Wind Partners gave me his views on the Romanian wind market today. Given the Euro crisis, his is the voice of caution. Mike joined CWP in October 2008. He spent 20 years working in senior finance, development and operations in the international power sector. In his 12 years with the AES Corporation, he was appointed President of their division covering Eastern Europe, North America and Turkey and later President of the division covering Central America and the Caribbean. During this time, Mike was instrumental in closing 1,700 MW of greenfield generation projects. Subsequently, Mike spent three years at Aldwych International, a start-up power company focusing on Africa, where he held the role of combined Finance and Project Director.

GPC: How do you see the Romanian market developing in the next 5 years? And beyond?
MS: I think it will be a lot slower than many of the protagonists would like. There is a lack of companies currently willing to provide long terms and financeable power purchase agreements which are required to attract significant bank finance. While a few smaller projects can always be done, the larger ones are dependent on finance from multi-laterals such as the EBRD and international banks. The ongoing Euro/ economic -crisis and deleveraging being forced by Basle 3 will massively curtail the appetite of the major commercial banks. Therefore scarce bank finance will migrate to safer markets i.e. not Romania. Now more than ever the flight to quality will hurt Romania unless they improve governance and consistency.

GPC: What are the key factors in maintaining ongoing investor confidence?
MS: There has been progress in 2011 in the regulations governing the sector, but there are still details to be sorted out and there still exists confusion and ambiguity. To mobilise large scale investment investors look for certainty. The ongoing debate about the shape of the power sectors and the possible creation of a “national champion” adds further uncertainty. Constant amendments to the planning regulations with poorly defined transitional provisoins also add chaos to the project development/ permitting process.

GPC: What do developers need to get right in order to attract project finance?
Long term bankable PPAs.

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