I attended and spoke at the 3rd Renewable Energy Finance Forum on Central and Eastern Europe in Prague. The event was attended by about 120 delegates including project developers, bankers, private equityEquity is the concept or idea of fairness in economics, particularly as to taxation or welfare economics. financiers, lawyers, renewablesRenewable energy is power generated from infinite sources, such as wind or solar power. Conventional energy is generated from finite sources, such as natural gas or fossil oil. manufacturers and consultants.

The overall sense I had was that prospects are still positive but this is a difficult region to be working in. The main concern for financiers and project developers alike is around the value of local currencies in comparison to the Euro. For project developers they worry about having to pay for renewables infrastructure in Euros but receiving returns on electricityA form of energy having magnetic, radiant and chemical effects. Electric current is created by a flow of electrons. generated in local currency, many of which have fallen sharply against the Euro in recent weeks . For both groups lack of long term policy measures in support of renewable electricity casts uncertainty of investments in certain countries or in certain technologies.

As ever gridA grid is a network of transmission lines, usually to distribute electric power . connection and capacity remains an issue, but in general it was felt that capacity was sufficient for a range of new smaller projects The countries with the best tariffs, and in many cases renewable resources (e.g. the coast of Poland), have seen much development in recent times and its possible that some of the riskier ventures will struggle to see the year through. Financiers will continue to invest in the region but its clear they will only be looking at the very strongest of projects in countries showing the highest predictability for tariffs and currency rates. Its generally agreed that there is much opportunity in the region but for the next 6-12 months expect banks and financiers to only be investing with those groups (i.e. utilities) with which they have strong confidence and a long term relationship. Also expect them to be sticking with known and proven technologies, particularly windWind occurs due to different temperature levels in the atmosphere (troposphere) which are heated up by the sun. A typical example are the trade winds at the equator where the sun is most powerful.. and biomassEnergy resources derived from organic matter. These include wood, agricultural waste and other living-cell material that can be burned to produce heat energy. They also include algae, sewage and other organic substances that may be used to make energy through chemical processes.
Biomass, a .... Financiers really do see the potential but now is a time for prudence. It is unlikely that local banks and financiers will step in to fill the gap left by foreign investors as for many local sources of money the renewables sector is a new area in which they have little experience. In addition, their mother institutions are pre-occupied with the current economic problems and are sending out conservative messages to their satellites.

On a more positive note, it was heartening to see the widespread acknowledgment of the benefits of implementing energy efficiencyUsing less energy/electricity to perform the same function. Programs designed to use electricity more efficiently - doing the same with less. measures. The use of ESCO‘s is now a well understood concept. Indeed certain banks, such as the EBRD, are factoring energyThe ability to perform work, mainly kinetic, potential, thermal energy, but also in forms of gravitational, sound, elastic and electromagnetic energy. efficiencyUsing less energy/electricity to perform the same function. Programs designed to use electricity more efficiently - doing the same with less. potential into their lending criteria with willingness to adopt measures being seen as a boost to a borrowers credit rating. The fact that ESCO’s take on the risk of projects very reassuring to financiers as are the quick returns on investment.

The following BBC News article may be of interest to those following financing in the region: http://news.bbc.co.uk/2/hi/business/7914359.stm