Over 148 billion U.S. dollars in new funding entered the sustainable energy sector globally last year, up 60 percent from 2006, even as a credit crunch roiled financial markets, said "Global Trends in Sustainable Energy Investment 2008," an analysis report issued by the United Nations Environment Program (UNEP) here on Tuesday.
"Just as thousands were drawn to California and the Klondike in the late 1800s, the green energy gold rush is attracting legions of modern day prospectors in all parts of the globe," said UNEP Executive Director Achim Steiner upon the release of the report.
The "green energy gold rush" came amid climate change worries, soaring oil prices and food prices all over the world, which experts say may trigger a potential long-term global economic recession.
The total sustainable energy capital flow was 204.9 billion dollars, of which 98.2 billion dollars went into new renewable energy generation, especially in wind sector in the United States, China and Spain. 50.1 billion dollars entered the technology development and manufacturing scale-up, with another 56.6 billion dollars changed hands through mergers and acquisitions, according to the report.
Most of the new money flowed into Europe, followed by the United States. China. India and Brazil, however, draw growing investor interests, when new investments in the three countries climbed 14 times from 1.8 billion to 26 billion dollars.
STIMULATION TO GLOBAL FINANCIAL MARKET
Inflation worries are heating up around the world and jolting financial markets in the process. While money managers' market outlook is getting gloomier, the surprising growth of investment to the sustainable energy sector last year is expected to become a promising stimulation to pull the market out of turmoil.
"Investment in the particular sector must continue to grow strongly if targets for greenhouse gas reductions and renewable energy increases are to be met," said the report, "the overall annual investment is expected to reach 450 billion dollars by 2012,rising to more than 600 billion by 2020. The sector's overall performance in 2007 and first two quarters in 2008 sets it on track to achieve these levels."
Power giant enterprises have stolen the spotlight in the global capital markets last year, with the wind sector attracting most investment globally.
Iberenova, the wind power development arm of Spanish power giant Iberdrola, raised 7.2 billion dollars in landmark floatation in December 2007, the largest Spanish IPO and the fourth largest public deal of the year all over the world.
Solar sector, nevertheless, attracted the most venture capital and private equity fund, amounting to 3.7 billion dollars. Chinese solar companies raised 2.5 billion dollars on the U.S. and Europe equity capital markets.
Investment not only soared in 2007, but also broadened and diversified into emerging renewable technologies. Mainstream capital markets are now fully receptive to sustainable energy companies, said the report.
General public investments, through stock and other markets, also more than doubled to 23.4 billion dollars, up from 10.5 billion in 2006. A record 17 new clean energy public equity fund launches occurred in 2007, up from just six in 2006.
"One reason for the steady growth of investment is simple economics: while the cost of fossil fuel energy is rising, the costs of renewable energy technology are falling," said Mohamed El-Ashry, Chairman of the Renewable Energy Global Policy Network.
REGIONAL GAP EMBRACES FUTURE OPPOTUNITY
The European Union (EU) remained the leading region for investment, particular later-stage financing. Supportive policies, as well as an investor base that is comfortable with financing renewable energy projects and more intense competition for deals, drove EU asset finance to a record high of 49.5 billion dollars, amounting to 62 percent of asset finance worldwide.
The acceptance of sustainable energy became more widespread in the United States last year, when the financial sector geared up for a major shift in political attitude. Citi Group, JPMorgan Chase and Morgan Stanley have jointly established a set of "Carbon Principles," which will guide them to advise and lend to major power companies in the country.
China witnessed a four time increase of investment, up to 10.8 billion dollars, in non-hydro renewables capacity, and new wind capacity doubled to six gigawatts.
"The 2008 Beijing Olympic Games sharpened the country's political resolve and strengthened programs to promote cleaner generation and cut energy intensity," the report said.
Among other countries of the so-called "BRIC group" (four dynamic emerging economies of Brazil, Russia, India and China), Brazil remains the world's largest renewable energy market, thanks to its long established hydropower and bioethanol industries, while India climbed up to the fourth place worldwide in terms of total installed wind capacity, owing to the 2.5 billion increase in asset financing.
Africa, however, continues to lag other regions in terms of sustainable energy investment, although asset finance was up to 1.3 billion dollars, five times as much as in 2006. Investment was mainly in biofuels and geothermal.
"Sub-saharan Africa, arguably the region that has the most to gain from renewable energy, remains largely unexploited," stressed the report.
Source:Xinhua
|
Comment
Tell A Friend
Print Format
Save Article