NEW ENERGY IN EMERGING ECONOMIES

Central America woos wind energy investor
Rikki Stancich, March 27, 2012 (Wind Energy Update)

[Lucy Heintz, Director of Energy, Actis:] " …The 102 MW Cerro de Hula (CdH) facility [51 Gamesa G87 2.0 MW turbines, implemented by Globeleq Mesoamerica Energy (GME) which is 70% owned by Globeleq, owned by Actis, the leading pan-emerging market private equity firm, and 30% owned by Mesoamerica Power, a group of Central American investors managed by Mesoamerica] is the first wind project to be built in Honduras…We are mainly operating in the Southern energy markets – Latin America, Central America, Africa, South Asia, and South East Asia. We are looking…for experienced developers with a track record and advanced-stage projects, with signed power purchase agreements…A lot is happening in India and Latin America…[and in] wind and solar in South Africa…"

[Lucy Heintz, Director of Energy, Actis:] "India is very active for renewable energy…[and] has instituted a lot of incentives…[in response to] extreme energy demand. The most interesting opportunities for us in India are currently in wind rather than solar…South East Asia is more challenging. Thailand is the only market with any real opportunity. The Philippines also has a good renewable energy law drafted and approved, however, the feed-in tariffs have yet to be introduced…Brazil is a big market for wind, but the project returns are on the lower side…There is also a lot of market competition…"

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[Lucy Heintz, Director of Energy, Actis:] "There is huge demand for energy in emerging markets…due to a growing middle class.
Our markets [e.g. Honduras, Chile and Colombia] have a good resource endowment in terms of hydro and wind. You just have a to look at a map of where the trade winds blow to realize that the capacity factor in this region is far superior to what you find in Germany and Spain…North Chile and South Peru have [good] solar resources…"

[Lucy Heintz, Director of Energy, Actis:] "Governments are focusing on…energy regulation frameworks…[to grow] private sector participation… [We see] an increasing number of EU and international developers with experience in wind and solar in Europe and the US, where the outlook is unattractive, looking to these new regions…Oil and gas prices have been a big driver in the last five years. Countries like Honduras [and Nigeria] and Chile rely on [diesel and natural gas] imports…The cost of electricity has gone up dramatically, which has been a big driver…for renewable energy. High oil prices will maintain that pressure on governments to seek out renewables…The opportunity for renewable energy distributed generation is also significant…the economics [for deployment] are compelling…"