Where are the best new wind markets?
Investors are always looking for attractive risk-to-return ratios and the wind sector in emerging markets can offer them.
There are a host of factors that companies in wind must consider when identifying the most suitable emerging markets in which to invest and, with little on-the-ground experience, it can be tough for firms to know which countries offer the best prospects.
We're here to help with that. Our second annual Emerging Markets report, published last week in association with investment bank and financial advisor Marathon Capital, includes our first Emerging Markets Attractiveness Index.
In this, we analyse the key trends that are affecting the wind market in 20 developing countries in Africa, Asia and Latin America, to help investors and other businesses to better understand the risk involved in entering those countries.
The index focuses on fundamentals such as GDP and population growth, as well as government renewable energy targets, other risks for businesses, and potential growth of the country’s wind capacity. We have combined our own data with information from sources including the OECD, Standard & Poor's, the World Bank and the International Monetary Fund.
You'll have to check out the report for the full findings, but here is a sneak preview.
Perhaps unsurprisingly, Asia's two economic superpowers, China and India, have topped our ranking, scoring respectively first and third, because of their strong business policies, and good prospects for economic growth and wind policies. Pakistan ranks tenth out of the 20 countries we consider, and is starting to show its potential thanks to solid growth projections and manageable business risks.
Latin America has some of the best- and worst-performing countries in our index, divided by economic fundamentals and political support. On one hand, Chile and Mexico are in our top five, due to their encouraging business environment and wind energy policies. On the other hand, Argentina and Brazil were among the lowest-ranked of the 20 countries we have considered, due to the heavy economic recession that has affected them in the last couple of years.
Finally, there are a host of diverse African countries worth keeping an eye on, including Ethiopia and Morocco. GDP and population growth prospects make various countries on the continent attractive for wind investment because of the projected increase in future energy demand. However, political and business risks for investors require further improvement across the continent.
If you want to find out the complete list of countries which we have analysed in our Emerging Market Attractiveness Index, click here. The report also features insights from weather measurement specialist Vaisala on the wind resources in those 20 countries; and we have a host of big-hitting interviews.