New Investment in clean energy worldwide rallied in the second quarter of 2009, reaching $24.4 billion, according to figures published recently by New Energy Finance. The data, which is based in actual deal and project transactions, show that during the second quarter, there was a big improvement on the first quart of 2009, when investment was just $13.3 billion. Despite this dramatic increase in investment, the investments of the second quarter were 37% below the investment amount from the same quarter last year, when the figure was $36.2 billion.
There were two major changes in investment when compared to the first quarter of this year. The was a jump in asset finance of projects such as wind farms and solar parks, and a sudden resumption of equity issuances on public market by quoted clean energy firms. The most striking aspect of the data is the pronounced geographical split. New investment in the second quart was remarkably weak in the United States, with new-build asset finance at just $1.6 billion, down a dramatic two thirds from the same quart in 2008. In Europe, The Middle East and African it reached $14.4 billion— the highest quarterly figure on record. This was mainly due to some big deals in offshore wind and solar.
The global data will boost hopes that the clean energy sector is through the worst of the economic downturn, but many will continue to worry that the pace of investment in clean energy will be insufficient to bring carbon dioxide emissions to a peak before 2020. The shortage of debt finance cause by the banking crisis is causing some of the biggest problems.
While not as acute as in the first quarter, it continues to delay many renewable energy projects and feed investor caution. The green stimulus programs initiated by many governments in major economies should provide a major boost. However, the vast majority of the money has yet to arrive and the bulk if it is unlike to be spent until 2010 and 2011.
A detailed breakdown of the second quarter statistics shows that new investment in clean energy companies on public stock markets jumped from a revised $133 million in the first quarter of 2009 to 2.4 billion in the second quarter, with Vestas, SunPower and Suntech among the companies raising money in share issues. However, this figure was still far down from the $5.7 billion raised in the second quarter of 2008, or the record $12.8 billion raised in the fourth quarter of 2007.
The biggest gain in new investment in the second quarter, in absolute terms, came in asset finance. New-build finance of wind farms, solar parks, biofuel plants and other projects rose to $20.5 billion in the second quarter, up from $11.4 billion in the first quarter. This dramatic increase was due to an increase in financings in Europe, particularly in offshore wind and solar thermal electricity generation. However global asset finance in the second quarter was still way down on the $27.1 billion figure achieved in the second quarter of last year.
Venture capital and private equity investment slipped in the second quarter, to $1.4 billion, from $1.8 billion in the first quarter this years and $3.5 billion in the second quarter of 2008. VC/PE players were more resilient than other investors during the worst of the banking crisis, but worries about exit opportunities have helped to put them in a more cautious mood, particularly toward immature technologies, than they were in 2007 or even early 2008.
© 2009, Tracey de Morsella. All rights reserved. Do not republish.