Clean energy investment increased by 14% in Q1
- 15 April 2014
LONDON: US$61 billion was invested in the global clean energy sector in the first quarter of the year, according to new data released by Clean Energy Pipeline.
Based on analysis of venture capital, private equity, project finance, mergers and acquisitions and public markets activity during Q1 2014, the sum represents a 14% increase on the US$53.4 billion that was invested in the same period last year.
The results also show financing for clean energy projects increased for the fourth quarter in a row, with figures for the first three months of 2014 totaling US$36.6 billion. Project finance for this recent period was also 18% ahead of the first quarter of 2013, when investment stood at US$31.1billion.
Clean energy companies also had considerable success on the public markets during this time frame, raising US$5.3 billion in early 2014.
In addition the clean energy analysts note that 24 public market deals were executed in early 2014, the highest number since the third quarter of 2011.
A number of major mergers and acquisitions (M&A) have already taken place this year, with Google’s purchase of the smart thermostat maker Nest Labs being among the most noteworthy. This US$3.2 billion acquisition is the seventh largest ever M&A transaction in the clean energy sector.
Similarly, the offshore wind sector experienced disruption during the first quarter of 2014 with the signing of a series of large acquisitions. Caisse de dépôt et placement du Québec’s took a 50% stake in the 630 MW phase one of London Array, worth US$1.1 billion, and Marubeni and the UK Green Investment Bank’s acquired a 50% stake – for US$399 million – in the 210 MW Westermost Rough project.
Total clean energy M&A activity amounted to US$12.8 billion during the time frame examined. This equates to a 14% decrease on the US$14.8 billion figure for the fourth quarter of 2013 but is 20% ahead of the US$10.7 billion noted in the first quarter of last year.
The independent research firm did however find there is room for improvement in venture capital and private equity investment in clean energy. While the US$1.57 billion invested during the first quarter of 2014 was in line with the figure for the final months of 2013, it is significantly less than the US$1.83 billion recorded during the corresponding quarter of 2013.
Douglas Lloyd, CEO, Clean Energy Pipeline, commented: “New clean energy investment was encouraging in 1Q14, marking a welcome change from recent press releases where we have been reporting year-on-year declines. The continued strength of the public markets is also giving the sector a more positive feel.”
Ben Ferrari, Director of Partnerships, The Climate Group stressed the importance of supporting clean energy: "The increase in international investment in clean energy is heartening to see. Businesses which are clean energy innovators deserve public and private support. Financial backing facilitates further research and development and enables these pioneering companies to cement their position in the global energy market. The low carbon economy is contingent on clean energy investment; let us hope this trend continues in the years ahead."
Graph courtesy of Clean Energy Pipeline
By Alana Ryan