China continues to expand its footprint over renewable energy markets in emerging economies, with the latest investment in a Polish wind farm project.
China-CEE Fund has announced that it will invest €309 million ($399 million US) in a 250 MW wind energy project in Poland. The project will be implemented in two phases. The first phase, expected to be completed by the end of December 2015, will have an installed capacity of 36 MW. The second phase will be much larger, with an installed capacity of 214 MW. The success of the first phase will be crucial for the entire project, as the fund is yet to conclude due diligence of the second phase.
The wind farm will be constructed by GEO Renewables; however, it is unknown whether the wind turbines and other equipment will be supplied by Chinese companies. Financing deals involving national development banks usually come with add-on deals for equipment supply as well. CEE Equity Partners, one of the constituents of the China-CEE Fund, is backed by the China Export-Import Bank.
Chinese government and financial institutions backed by the Chinese government have been extremely aggressive in expanding their presence in emerging renewable energy markets. With developed renewable energy markets like the US and EU imposing import duties on Chinese products, the Asian manufacturing powerhouse has focused on the developing markets in Africa, Asia and Eastern Europe.
Poland probably represents the highest potential in renewable energy growth in the EU. The former communist state has been extremely reluctant to transform its fossil fuel-based economy. Coal continues to supply about 90% of the country’s energy requirement. The country has, on a number of occasions, objected to the EU’s intention to increase emission reduction targets or boosting renewable energy and energy efficiency targets.
Renewable energy remains the only viable option for Poland to reduce its emissions. While the country has vast reserves of coal, the carbon capture and storage technology remains unproven and costly.
Image: Polish flag via Shutterstock
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