SAM predicts rapid growth in clean tech private equity
28 MAY 2010BY NINA RÖHRBEIN
GLOBAL – Clean tech private equity has grown to 9% of global private equity investments and is expected to continue its rapid growth in the years to come, according to Swiss-based asset manager SAM.
In its 2010 report ‘Clean Tech Private Equity: past, present and future’ SAM estimates that clean energy investments capture about 70-80% of the total clean tech market and asset finance is the largest clean tech segment with around 57% of total clean energy financing.
Increasing demand for clean tech solutions will be buoyed by rapid global population growth and ageing infrastructure; increasing demand for energy and other natural resources; rising CO2 levels; water scarcity as well as government regulation aimed at security of energy supply; protection of environment and development of advanced technologies.
The report says: “To meet the growing demand for energy, the [International Energy Agency] IEA predicts that until 2030, $26trn (€21.1trn) is needed in investments. That is over $1trn a year or a bit more than $3bn a day. Part of this money will be used to replace or modernise existing power plants and infrastructure, but the greater part is needed to extend energy supply. Securing enough energy supply for everyone will be a big challenge.”
It further states that venture capital investments – which have totalled nearly $22bn in 2312 deals since 2000 – are mainly dominated by North America and are one of the largest segments of global venture investing.
Development capital and buyout investments are pegged at about $29bn in 485 deals since 2000. They are mainly of North American and Western European origin and have seen the fastest growth with a compound annual growth rate (CAGR) of 90% between 2000 and 2008.
Asset investments, which are a forte of Western Europe and the rest of the world, have amounted to approximately $379bn in 4388 deals since 2000. This segment has a CAGR of 64% between 2000 and 2008.
Earlier this year, Marcel Gerritsen, managing director/global head at Dutch-based Rabobank, whose subsidiary Robeco has formed a strategic alliance with SAM, told IPE that investments need to come from a variety of sources to allow the renewable energy sector to continue its growth.
“Investments in energy efficiency have the shortest pay-back time and there have been a lot of energy efficiency related developments in the real estate sector,” said Gerritsen. “But to address the problem of a widening gap in energy supply and demand you need to attack it from several angles and all of those need to be launched together.”