Ill wind of corruption in Sicily's alternative energy sector

 

Like giant sentinels, dozens of wind turbines straddle the mountain ridges near Sicily’s infamous Mafia stronghold of Corleone.

However, despite a strong breeze rippling the leaves in groves of olive and fig trees, the soaring blades of the turbines have stood motionless for over a year. Further west, near the port of Trapani and the ancient hill-top town of Salemi, two more wind farms are similarly frozen.

Just who approved, built and sold these renewable energy projects, which were developed on the basis of public subsidies, has become the subject of investigation for Sicily’s anti-Mafia magistrates, who are trying to keep track of organised crime’s latest move into mainstream business.

Multinationals are starting to find out something that is well known to Italian investors - that concealed beneath Europe’s most generous system of incentives, there exists a web of corruption and shady deals.

Rossana Interlandi, recently appointed head of Sicily’s environment department, explains that project developers - she calls them “speculators” - were also lured by the appeal of a law that obliges Italy’s national grid operator to pay wind farm owners even when they are not producing electricity.

Some wind farms are not supplying power because operators are waiting to be connected to the grid and for an upgrade of the cable linking Sicily to the mainland.

Despite a profusion of projects across southern Italy, the country ranks low in terms of wind power output. The International Energy Agency says wind power in Italy generated just 1.2 per cent of electricity in 2007, compared with nearly 20 per cent in Denmark.

Interlandi puts the number of wind farms in Sicily at 30 (although industrialists say the figure is higher) producing a total of 600MW. Sixty more wind farms have approval for a further 1,800MW, while 226 projects have requested approval that she says will not be granted. “Enough” she exclaims. “Many speculators made money on the backs of the government.”

There is also a growing movement of citizens and local mayors who oppose what they see as despoliation of Sicily’s scenery. In fact, the freeze on new projects was put in place under the previous administration of Salvatore Cuffaro. Just two months earlier, Cuffaro had been convicted by a court in Palermo for helping the Mafia in a case involving the public health sector. He was given a five-year jail sentence. Cuffaro, now a senator, has appealed and his case will be heard this month.

The immediate impact of the freeze was to raise the value of those projects already approved. Asked who had managed to obtain the much sought-after permits, Interlandi points to Vito Nicastri - a Sicilian developer otherwise known as 'lord of the winds' - as the most successful.

Nicastri is to be found at work at his Eoli Costruzioni headquarters next to the cemetery on the edge of Alcamo, a picturesque hill town founded by Arab conquerors in the ninth century. Over coffee, Nicastri confirms that he has developed the “majority” of Sicily’s wind farms - arranging land, financing and official permits. He then sold the projects for construction to IVPC, a company run by Oreste Vigorito, who is also president of Italy’s wind power association.

Nicastri says he has worked on projects resulting in construction of wind farms for International Power (IP) of the UK, Falck Renewables, the London subsidiary of Falck Group based in Milan, IVPC and Veronagest, an Italian firm.

Nicastri is mentioned but not charged in a 530-page court document that resulted in the arrests in February of eight people - local officials, businessmen and an alleged Mafia boss - all accused of corruption in a wind farm project.

Investigators tapping the telephone of a local official intercepted calls to Nicastri. Nicastri acknowledges the investigation and that he may be investigated again, but denies any wrongdoing. “We are a healthy company with 100 employees” - he says.

IP became the single largest wind farmer in Italy with its 2007 purchase of the Maestrale portfolio of mostly Italian wind farms - including five in Sicily - for €1.8 billion from Trinergy, an Irish company. IP said it was aware of investigations in Sicily, adding - “But we are not aware that current investigations by the anti-Mafia prosecutor are, to any extent, connected to our wind farm projects.”

IP said it knew Nicastri was the project developer, but it had no direct relationship with him. For Nicastri and other Sicilian developers, wind power is now passé as the market is virtually saturated. The future, they say, is solar.

However, the regional government under Raffaele Lombardo is now promoting micro-projects for Sicily’s five million people, so that households and companies can generate their own wind and solar power. Part of the logic of the strategy is to minimise involvement of the Mafia.

Source - The Irish Times
(Copyright The Financial Times Limited 2009)