Global clean energy sector investment falls for first time

Total investment in the global clean energy sector has fallen for the first time in history, according to a report from data company Clean Energy Pipeline.

$256bn (£159bn) was invested in the sector in 2012, which was a 14% decrease on the $293bn recorded in 2011 – the first time investment has ever fallen year-on-year.

The sector recovered strongly in the fourth quarter of 2012 to $67.6bn, a 19% increase on the previous quarter but the final flurry could not buck the general trend.

Despite another late surge in the fourth quarter, project finance declined 17% annually to $150bn – the first time that project finance has failed to grow year-on-year.

Clean Energy Pipeline CEO Douglas Lloyd said: “Annual volumes couldn’t keep increasing inexorably given low gas prices in the US, ongoing policy uncertainty and weak global capital markets.”

“However, the decline should be put into perspective. The $68bn invested in the fourth quarter of 2012 was more than double the $33bn invested throughout 2004.”

Clean energy mergers and acquisitions also showed a huge increase in the fourth quarter totalling $18.3bn, a 16% increase on the $15.4bn transacted in the third quarter and a 38% increase on the $11.4bn recorded in the corresponding period last year.

The increase was mainly caused by a swathe of acquisitions in the wind sector, as GDF Suez announced the sale of a 60% stake in 363MW of operational Canadian wind capacity to Mitsui and Fiera Axium in December 2012.

The $1.2bn sale of a majority stake in Italy-based wind farm operator IP Maestrale to ERG Renew was also completed.

Asian companies stood out for their international acquisition activity in the fourth quarter, announcing 12 transactions of non-Asian clean energy assets totalling $2.4bn, significantly more than the $711m announced in the corresponding period in 2011.

However, global venture capital and private equity investment in clean energy (excluding buyouts) fell for the fifth consecutive quarter to $1.6bn in the fourth quarter of 2012, a 9% decrease on the $1.8bn secured in the previous quarter.

Venture capital and private equity investment is now at its lowest quarterly level since the first quarter of 2009. Investment in the full year 2012 totalled $7.4bn, less than half the $15.3bn invested in 2011.

Conor McGlone

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