Speaking about the agreement to Windpower Monthly, PPC Renewables only said it would release details once "significant progress has been made towards any of the three project plans. Given Sinovel's problems in China, one could be forgiven for assuming PPC will not be issuing anything soon.
However, Sinovel representatives have continued to visit Greece. The last time was in May, according to the Greek media, when senior Sinovel officials travelled to Athens to meet with representatives of a local developer, discussing plans to jointly install new wind projects.
A previous visit of Sinovel's vice CEO Tao Gang in Athens in September 2011 led to speculations that the visit was planned to seal a deal with PPC Renewables to build a 220MW wind farm in Rodope prefecture, Northern Greece. The deal never took place.
Both face financial trouble
Market sources that prefer to remain anonymous told Windpower Monthly the main reason for the Rodope project failure rested not with Sinovel but in the dire financial situation of PPC.
Such a claim sounds reasonable. PPC reported in November a €6.7 million profit in the first nine months of the year, but the company faces some threatening financial issues. A PPC spokesman said that "unpaid electricity bills to PPC have increased during the last two months by four million a day". Electricity tariffs this year have increased significantly in the country and many households and businesses are unable to pay their bills. The situation for PPC is only projected to become worse in the coming months making capital for renewable energy investments scarce. Local banks are also dry of cash.
Nevertheless, PPC could seek investment capital abroad. This is at least the case regarding PPC's recent €739 million bond loan with a consortium of foreign banks. A PPC spokesman told Windpower Monthly "the sum will be used to partially finance the construction of lignite station Ptolemaida V, which will have a 660MW installed power capacity and a total budget of €1.4 billion."
Therefore, Sinovel's financial troubles cannot be ignored either. In October, the company posted a net loss of €83 million in the first nine months of the year, up from €32 million a year before.
Still, given the Chinese wind market in recent years has experienced a dramatic contraction, the company needs now more than before to invest in overseas markets. Whether Sinovel sees Greece as a strategic market for the future could be determined by both Greece's policy decisions and the country's geographic position.
Why Greece matters
Greece's wind market has stalled in recent years, but a market resurgence is possible. Specifically, Greece's RES fund, used to pay renewable energy producers, faces a huge €500 million deficit, which the government aims to eliminate by introducing new policy measures. Many blame investor fear regarding the new policies as a factor delaying wind investments. If the new measures expected to be introduced within weeks do not 'punish' the wind sector, more investments are expected.
Greece's geography might also affect Sinovel's decision. Chinese manufacturers have a strong advantage in investing in Greece towards local production units. This gives access to Piraeus Port, the biggest port in Greece located next to the capital city Athens. China's state-owned global shipping giant Cosco runs half of the port. Initially, Cosco launched operations in Piraeus Port in 2009, signing a €500 million deal. A new €224 million investment is also being negotiated between the Greek government and Cosco, which will permit Piraeus port to expand further. Cosco's chief has repeatedly expressed his aspiration to use Piraeus port as the Chinese gateway to Europe.
Eva Fragioudaki, communications director at the Greek official investment promotion agency Invest in Greece, said that in May Invest in Greece representatives accompanied the Greek prime minister and a Greek business delegation to China. Invest in Greece "signed a cooperation agreement with the China Development Bank, with the main objective to promote economic cooperation between the two countries in priority areas such as energy", Fragioudaki said.
The objective, as defined in the agreement, Fragioudaki added, "is that China Development Bank will promote Invest in Greece investment projects in Greece to Chinese enterprises and, after evaluation, will finance their implementation".
Should the Greek wind policy framework in the immediate term settle positively for the sector, many analysts expect China Development Bank to fund new Sinovel installations in Greece. It remains uncertain however who will be Sinovel's partner — PPC or another local developer.