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China's Goldwind enters Brazil with $270m Energimp deal
2018-06-30
Source: GOLDWIND

Chinese OEM giant to make debut in key South American market replacing and repairing 363MW Impsa fleet

After more than two years of studies, due diligence on local industrial facilities and negotiations with partners, China’s Goldwind has announced a R$1bn ($270m) deal to replace or repair 242 turbines of the failed Argentine OEM Impsa in Brazil, with a total capacity of just over 363MW.

The deal represents the official start of Goldwind’s commercial operations in the South American nation, where it will compete with six other OEMs already active there.

The machines are in place at two sites in Northeastern Brazil and two in the country’s south. They are operated by local renewable energy firm Energimp, formerly the wind development arm of Impsa. Some of the turbines are still operational but most are at a standstill for lack of maintenance since Impsa went under in 2015.

 

“Right now the turbines are being shipped from China, and in the first stage we will replace 181 machines in one year,” said Rafael Guerra, business development manager at Goldwind’s Brazil office in São Paulo. The balance of the Impsa machines are set to be overhauled.

Initially, the company will import parts and complete machines for its GW77 1.5MW permanent-magnet direct-drive platform, but officials indicated that other newer models, such as the 3.0MW(S), could also be marketed in the country and the wider region.

The deal, which also involves long-term operations and maintenance contracts, only started to become possible in early 2016, when Goldwind won a court battle for the right to market in Latin America the Vensys technology used in Goldwind and Impsa turbines following the start of bankruptcy proceedings against Impsa involving billions of Brazilian real.

In the presence of Goldwind’s top management, including chairman Wu Gang and executive vice-president Cao Zhigang, the Chinese firm this week announced a four-pronged strategy to enter the South American region focusing on three countries – Argentina, Brazil and Chile.

According to deputy general manager Andreas Dupuis, the company’s strategy comprises turbine supply, operation and maintenance services, acquisition of local wind power assets, and smart and microgrid solutions.

In Chile and other countries such as Ecuador, Goldwind is a simple turbine supplier. In Argentina, it recently bought 300MW in wind power assets that it will build in the coming years, and in Brazil – where it has its South American headquarters – it has opened service centres as part of the Energimp deal.

The company now has a potential fleet of over 800MW under development in the region, including Brazil, said Dupuis.

“If you look at it we now have three generation of turbines here: the 1.5MW, the 2.5MW and now the 3MW,” he said.

Dupuis said this does not mean that the company has given up studying the possibility of opening up an assembly plant in the region, especially now that Goldwind expects to have to build up a supply chain for its services and wind farm development ventures and deals .

“A pre-condition has always been to enter the region through localisation,” he said.

For Goldwind’s chairman, Wu Gang, Brazil has natural resources, industrial capacity and energy demand for long-term investments.

“Today we signed a contract that is not just about business but about the responsibility to help our partner to achieve success,” he said.

For Energimp, which is now controlled by former Impsa creditors such as federal bank Caixa Economica Federal and the Fi-FGTS fund, the deal could put it back in play in Brazil’s 1GW to 2GW a year market.

“It’s not a simple contract, but it’s a big solution,” said Energimp general manager Marcio Almeida.

According to Almeida, the creditors agreement involved the sale of 400MW in wind assets, the restructuring of R$1.5bn of debts with FI-FGTS and now the R$1bn deal with Goldwind, which will allow it to look forward to renewed cash flow.

Although Energimp officials said they would renegotiate some of the terms of the 2009 PPAs and the late 1990s Proinfa contracts of the projects whose fleets are now being restored by Goldwind, neither company said how Energimp would pay for the Goldwind services.