Mr. Papadopoulos spoke for Capital Investments in Renewable Energy Resources sector in Greece.
Firstly, he started referring to the growth of VC in Greece mentioning the following:
- 20 Venture capital management companies for PE, VC, incubators. 11 new funds created since 2004 after the launch of TANEO framework, with more than € 250m. total funds under management. € 5bn private equity fund raised in 2007 for large buyouts. EU Structural Funds (4th FP) 2007-2013 initiatives are underway
- Attica Ventures is a venture capital management company incorporated precisely for the purpose of managing VC funds as stipulated by article 7 of Law 2992/2002. Considered the most active VC management company in Greece (Proto Thema, Economist – Greek Edition, Infocom, SBC Channel etc)
- 12 investments so far in Greek SME’s (totaling € 36 million –more than 60% of our funds invested-reserved) which have achieved substantial and constant growth rates and have received many and important business awards
- Attica Ventures has more than €14m co – investments at second round by employees, private investors and institutional investors. 4 IPO’s at ASE so far – Mediterra, Doppler, Performance Technologies, Foodlink
- 3 investments in RES projects- 21MW already connected to the grid (wind-PV projects)
- More than 800 new jobs created, with more than € 150m total investments
- Honored with the 2011 ACCI award for its contribution to employment growth.
Afterwards, Mr. Papadopoulos explained the plenty of opportunities in RES market.
- Greek Government has set the targets according to the EU directive, well known as 20-20-20 (20% participation of RES in total energy consumption in 2020). This means that in 2020, the participation of RES will be 40% in total electric production, 20% in total heating-cooling needs and 10% in transportation. The new law for RES, is trying to motivate citizens and communities. 1% of each RES project is going directly to the citizens of the municipality. 2% is going to the local authorities for specific use only related to the Green Fund.
- The total output from RES stations has been increased in 2011 by 770 MW. The total output from RES by the end of 2011 was 2.500 MW. The target set for 2020, is the total output from RES to be more than 14.500 MW
- By the end of 2010, there are production licenses for 18.819 MW, new applications for licenses for 72.775 MW, 1669,9 MW having installation license and 4.358 MW having grid connection offer. More than 9.000 MW must be installed until 2014 in all types of RES – total funds to be invested until 2014 more than € 14 bn! More than 14.000 MW must be installed until 2020 in all types of RES – total funds to be invested until 2014 more than € 20 bn!
In addition, Mr. Papadopoulos spoke about the potential on RES in the following years:
- Development law provides substantial subsidies in various forms
- Incentives have been applied by the new law- e.g. increase of the price for projects with lower wind power potential, in order to become viable
- The feed in tariff provides secure returns in all RES technologies.
- Feed in tariff is not subsidized by the government but is paid by the electricity consumers.
- Investments in RES projects are similar to high rated bonds, since you have a fully licensed and technically feasible project. Feed in tariff guarantees a return of minimum 20% (in terms of IRR) for the initial investor (project developer) and 12% (minimum) for the secondary buyer.
Finally the CEO of Attica Ventures analyzed the Risk factors of such a type of investment:
- Tax system
- Economic uncertainty
- Cost of licenses (buy of develop new ones)
- Construction process under many risks (urban planning authorities, archaeology authorities, PPC etc)- may have a delay of more than 1 year!!
- Technical due diligence of proposed projects
- Quality and Warranties of materials