Tomer Eizenberg
CEO
Mashav Energia

09 January 2020

Mashav Energia has been working in the Polish market for the past 10 years, developing, constructing and operating wind farms. In 2018 the company started construction of the Potegowo Wind Farm, the largest of its kind in Poland.

Could you give us an overview of Mashav Energia and the milestones you reached in Poland so far?

We have been working in Poland for a decade now, successfully I might add, and experienced the ups and downs of this market first hand. People forget that 2012-2013 were also very tough years, so by being here we’ve learned that resilience goes a long way. 

So far we have successfully developed 60 MW and in 2018 started construction of the largest project in Poland, Potegowo Wind Farm, with an installed capacity of 220 MW. We started this project before the auction system was announced, without any government support. We see it as a truly breakthrough project because it encapsulates our years of experience.

What would you say are the most important lessons that you learnt on the way, and what advice would you give to other players in Poland’s volatile renewables market?

One critical lesson is that there is a big difference between “ready-to-build” and “bankable”. The nuances between the two are mainly related to the hundreds of “boxes that need to be checked” in the preparation phase. For instance, you can have a building permit and a beautiful project but not the ability to bring over the turbines, because you lack agreements with local municipalities to cross a certain field.

 

A crucial element for bankability is to really know what you are constructing. Before we even agreed the price, we understood the scope of work not just at a macro scale but to the very last detail.

 

For Potegowo we dedicated ample time to prepare ourselves for construction. We went through everything line by line, paying attention to all the bits and pieces that had to slot into place. We persuaded our shareholders to invest before we secured financing, to really prepare this project to the level where we can actually start construction. 

Did you find the administrative processes in Poland easy to navigate?

My suggestion to whoever joins the market is to employ someone who truly knows how to navigate within the local system. It is not specifically a legal, construction or financial role - the relationship with the authorities is a very delicate endeavor that incorporates all these aspects. So whoever is in charge must have a holistic background. 

 

Once we knew the rules and understood the process, it became easier, and we are now very satisfied with how professional and engaged the administration has been.


How is the construction of Potegowo Wind Farm progressing? Will it be ready mid 2020 as anticipated?

We are actually ahead of schedule and we are optimistic that we will have all 81 turbines installed on time. We regard this as a huge achievement to build such a big farm. 

The project is unique in Poland through its size. What motivated you take on such a  big undertaking?

This is also linked to lessons learned from our past - in order to be sustainable you have to go big. The renewable energy market is very fragmented, not just in Poland but generally in the world. The administrative burden for a small wind farm is the same - maybe not as time consuming, but you still need to tackle the same items and have the same expertise. 

Going big meant that we could reduce the operational costs, by allocating the same resources in a much more concentrated way. In addition, when you approach suppliers or investors, there is a sweet spot for large projects. Large is strategic. 

You mentioned the project started out without any state support. How are you ensuring its funding?

Our business case was designed so that we do not have to rely on public support, but in October the government announced an auction, which we ended up winning. It just made our financing scheme easier. We currently work with five different banks and we were in discussions with all of them prior to winning the auction. 

 

One thing you must understand about renewable energy is that a long-term view is unsustainable. The landscape is exciting but ever changing, not just in Poland but everywhere else. We saw the Polish market set rules that practically halted all development and then change it afterwards - it is cyclical, boom and bust.


Corporate PPAs have recently been introduced in Poland. Do you see them as a good instrument for your business?

We look at PPAs as a risk aversion tool for our stakeholders. We have been exploring this option for the past 10 years and have signed a few (also some CPAs) for our previous work, because there was no other way to finance the projects. 

In this instance, we took it upon ourselves to make our business plan sustainable regardless of PPAs. We embrace and even prefer the merchant approach, because we can sit in front of everyone and demonstrate that we are resilient to the ever-changing energy sector. Infrastructure investments are for the long term and the price is ultimately dictated by the market. You must be able to compete with other sources for energy production.

What final message would you like to send out based on your experience here?

Our long-term view is that wind is one of the best resources Poland has to offer. The market has exhibited resilience in the face of everlasting changes to RES regulation and has an extraordinary collection of experts. Our experience here has been extremely good.

Patience and persistence is the key especially for large projects. There were times when companies didn’t want to talk to us. Yet we persistently and very patiently continued our efforts. We hired people when the entire market was dismissing and worked harder when the rest of the market was waiting it out. And this is why we managed to get to where we are today, because of the really hard work of our team, who believed even when it was very easy to give up. The lesson is that if you do the right job, it will eventually pay off.

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