Investments in new energy plants are affected by the crisis

Ben Holland, Partner in the CMS Cameron McKenna law firm, said that companies, in order to finance their cash flow, will now turn to their shareholders for funds (instead of banks), will sell non-core assets, and will cut their 2009 acquisition or development budgets.

“Many of the 2009 projects will be canceled, which is all right in the short run, but the problem is what will happen in the future, when the effects of the crisis passes and consumption returns to an upward trend. I consider that sometimes one must be brave and invest during the crisis, though one is subject to many pressures,” added Holland.

Specialists on the market warn that the program to rehabilitate thermal plants will be difficult to continue due to the global limitation in equipment production, in spite of strict deadlines to comply with environmental requirements.

Investments in local energy production capacities are affected by expectations of a drop in consumption and the volatility of the price of oil, which influence the prices of other raw materials and products, and implicitly make business plans and access to financing increasingly difficult.