Russia

Russia

Program slowed by uncertainty

Economic and political turmoil in Russia is hampering possible business partnerships between American wind companies and the Russian far east. Just six months ago officials at the US Department of Commerce were describing their first renewables training program for Russian workers as a resounding success. At that time they said the ground breaking scheme would soon lead to a great deal of business in the far east of the former Soviet Union. But now, as Russia continues to flounder, the outlook for wind investment is no longer so bright.

For six weeks in July and August, 13 renewable energy experts from the former Soviet Union were trained in America in what appears to have been the first renewables program financed by the US Department of Commerce. The Special American Business Internship Training Program, or SABIT, operates specialised projects in the Ukraine and Russian far east. This was the first time that renewables -- wind, solar, hydro and geothermal -- had been the specialised focus.

The Russian interns not only get hands on experience of US technology and management techniques, they often continue to build upon the links they have made with the host companies, which opens up possibilities for American business in former Soviet countries. But with the value of the rouble and the region's banking chaos, there may be little to do but wait. "A lot of good relations were formed and a lot of potential business contacts were made," says the program co-ordinator, Liza Shields. "But because of the economic crisis in Russia they could be held up substantially."

Business spin-offs

She cautions, however, that it is too early to gauge the size of the possible business spin-offs for American companies. It can take many many months, even under normal business circumstances, to judge the success of a program, she says. Mike Bergey of Bergey Windpower Corp, a maker of small wind turbines and one of the companies visited, agrees. "Our projects usually take so long to formulate," he says. "But we certainly expect that it will slow things down." Equipment sales, he notes, are especially sensitive, because the Russian currency has become so devalued.

SABIT's program, founded in 1990 to support economic restructuring in the former Soviet Union, is said to have lead to $15 million worth of US exports yearly. Investment opportunities had also been expected to triple over the next five years. SABIT says that 70% of the trainees on its programs continue to do business with their US hosts.

After the SABIT renewable energy trainees had completed a one-week orientation course in Denver, they visited companies and sites that included Enron Wind in Tehachapi, California, the Foote Creek Wind Plant in Wyoming, Central and Southwest Corporation of Dallas and the wind fair in Tehachapi. Especially promising were connections made between US companies and the Nakhodska economic zone, a seaport, and Primorsky. Both of the areas, dominated by forestry and fishing, need rural electrification for remote villages. There is even an old mine that is now powered by diesel -- and it sees wind as a very economic alternative.

About 80% of the promising contacts made during the program were for wind. The four other SABIT programs, which together receive a total of $1 million, have brought over specialists from oil and gas, mining, fisheries and infrastructure.

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