INVESTMENT I ANALYSIS
Countries showing a bounce in investment in the latest quarter were Canada, France and India, while there were significant projects financed in a number of new markets, including Myanmar and Sri Lanka
Investment deals
Among the eye-catching asset finance deals of the July-to- September period were $1.1bn for the 231MW Shizen Energy Setouchi PV project in Japan, an estimated $850m for the 530MW Huanghe Hydropower Gonghe Longyangxia PV plant phase two in China, and $642m for the 60MW Dublin waste-to- energy project in Ireland.
Public market transactions included a $620m secondary share issue by Chinese PV manufacturer Hareon Solar Technology, a $577m initial public offering by US renewable energy generator TerraForm Power, and a $305m issue by Spanish wind turbine maker Gamesa Corporacion Tecnologica. The biggest venture and private equity transactions were $250m for Mexican wind developer Zuma Energia, and $80m for Chinese LED lighting specialist Lattice Power.
A regional breakdown of clean energy investment showed the continuing troubles of the sector in Europe, where just $8.8bn was committed last quarter, the lowest figure for over eight years, down from $12.1bn a year ago. There was a notably weak total from the UK, at $789m, down from $3.1bn a year earlier as policy uncertainties took a toll. Germany was at $1.5bn compared to $1.6bn in Q3 2013, and Italy at just $262m compared to $1bn, reflecting the impact on investor confidence of retroactive cuts in support for existing solar projects. France saw a rise to $1.4bn from $951m in Q3 2013.
“However, there is no room for complacency because clean energy investment of between $200bn and $300bn a year is not large enough to herald the rapid transformation of the power system that experts say is required if the world is to see a peak in CO2 emissions around 2020. There is still too much policy instability holding back investor confidence.”
The Q3 2014 figures showed global asset finance for clean energy projects such as wind farms, solar parks and geothermal plants reaching $33.3bn, up slightly from $32.8bn in the third quarter of last year. Investment in small-scale projects such as rooftop solar was $18.3bn, up from $13.9bn a year earlier, while equity capital raised by specialist clean energy companies on the public markets was $2.7bn, up from $2bn in Q3 2013. Venture capital and private equity investment was $918m in Q3 2014, up from a multi-year low of $592m in the same quarter of 2013.
The US saw clean energy investment of $7.3bn in Q3 2014, well down from $10.7bn in Q2 but up from $5.7bn in the third quarter of last year. Overall Chinese clean energy investment was $19.9bn in Q3, up from $15.1bn a year earlier, while India’s investment totalled $2bn, up from $1.3bn. Canadian investment was $1.9bn, up from $1.3bn, and Brazil’s was $863m, up slightly from $830m but still one of that country’s weakest quarterly figures for many years.
Luke Mills, associate, clean energy economics at Bloomberg New Energy Finance, said, “The third quarter data owed a lot to solar in China and Japan. We would expect to see a broader range of countries and technologies attracting investment in the billions of dollars in the fourth quarter, traditionally the busiest of the year for clean energy.”
©2014 Permission required. Angel Business Communications Ltd.
Issue V 2014 I
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