Investments in renewables top $100 billion in 2006
We're nearing the end of the year, and it's been a busy one for us. Since going online, we have been reporting on quite a number of projects and investments in the bioenergy sector in the developing world. But now it's time to get a more global overview. How much money did the green energy sector as a whole attract this year? Which countries and sectors were most active? And what does next year have in store? New Energy Finance helps us find out.
According to this specialist provider of financial information and research on investment in the sector, clean energy and low-carbon technology industries are on course to set a new record [*.pdf] of more than $100bn worth of financing transactions over the course of 2006. Bioenergy and biofuels were by far the fastest growing sectors, attracting ten times more money in 2006 than in the previous year.
It is estimated that total deal volume for the full year will be around $100bn. Of this, $70.9bn will be new investment, an increase of 43% on 2005, while $29.5bn will consist of M&A activity, leveraged buyouts and refinancings of assets.
The biggest growth has been in public markets and venture capital/private equity investment activity, which increased by 141% and 167%, respectively. Asset financings grew at a more sedate 22.9%. Public market fund-raisings for clean energy companies will breach the $10bn mark for the first time in 2006, reaching $10.3bn, up from $4.3bn in 2005 and $0.7bn in 2004.
Interest in clean energy-related IPOs was exceptionally strong in the first four months of the year, following President George W Bush’s “Addicted to Oil” remarks in his State of the Union Speech. This fell away following the market correction in May, only to return during Q4, to coincide with the publication of the Stern Review, which highlighted the relative economic returns from acting to prevent climate change, and the US elections, which signalled a change of heart towards the sector.
Going into the final week of the year, the WilderHill New Energy Global Innovation Index (NEX), the quoted index which charts the value of more than 80 of the world’s leading quoted clean energy companies, is up more than 30% on the start of the year:
ethanol :: biodiesel :: biomass :: energy :: sustainability :: renewables :: solar :: wind :: biofuels :: bioenergy :: investments ::
Qua volume, the leading sector of the industry for investment on the public markets during 2006 was solar, attracting $4.4bn – more than double the $1.7bn in 2005. Biofuels and bioenergy were the fastest growing sector with $2.5bn, which was more than 10 times the amount raised in 2005. Wind was relatively static, raising just $1.2bn worldwide on the public markets, against $1.1bn in 2005.
Specialist carbon market service providers, such as brokers and carbon fund managers, were the big losers in terms of public market fundings, raising only $67m in 2006, compared with $465m in 2005. Reasons range from the crash in the European carbon prices in April to the limited time before the Kyoto Protocol falls away in 2012 and the entry of large commodity and banking players into the market. Despite the lack of interest among public equity investors, the volume of money in specialist carbon funds powered ahead during the year, reaching more than $7bn by year end.
The hottest geographical market of the year was Frankfurt, where a total of 15 clean energy deals raised $2.6bn, including the $1.5bn IPO of Wacker Chemie, one of the global leaders in the production of solar silicon, a bottleneck commodity. NASDAQ registered 21 deals and $1.7bn in funds raised, while London’s AIM remained the favourite among smaller companies, attracting 29 clean energy deals worth a total of $1.2bn.
New Energy Finance has identified a healthy pipeline of IPOs for early 2007, with a record number of companies having filed registration papers or in discussions with advisors, suggesting that momentum will be strong into the New Year. Biofuels, solar and wind companies look set to continue to dominate the volume.
Venture capital and private equity investment looks set to top $7.0bn for the full year 2006, an impressive 167% increase on 2005. Growth was concentrated in private equity for expansion which soared in 2006 to $2.6bn, almost triple the $874m seen in 2005, with the cash mainly flowing into biofuels capacity.
There was significant growth in later stage venture capital deals, particularly series C, as investors chased exceptional returns. Over-the-counter and private investment in public equity (PIPE) deals showed similar growth. Early stage venture capital investment, including seed and Series A and B deals remained weak, however.
According to this specialist provider of financial information and research on investment in the sector, clean energy and low-carbon technology industries are on course to set a new record [*.pdf] of more than $100bn worth of financing transactions over the course of 2006. Bioenergy and biofuels were by far the fastest growing sectors, attracting ten times more money in 2006 than in the previous year.
It is estimated that total deal volume for the full year will be around $100bn. Of this, $70.9bn will be new investment, an increase of 43% on 2005, while $29.5bn will consist of M&A activity, leveraged buyouts and refinancings of assets.
The biggest growth has been in public markets and venture capital/private equity investment activity, which increased by 141% and 167%, respectively. Asset financings grew at a more sedate 22.9%. Public market fund-raisings for clean energy companies will breach the $10bn mark for the first time in 2006, reaching $10.3bn, up from $4.3bn in 2005 and $0.7bn in 2004.
Interest in clean energy-related IPOs was exceptionally strong in the first four months of the year, following President George W Bush’s “Addicted to Oil” remarks in his State of the Union Speech. This fell away following the market correction in May, only to return during Q4, to coincide with the publication of the Stern Review, which highlighted the relative economic returns from acting to prevent climate change, and the US elections, which signalled a change of heart towards the sector.
Going into the final week of the year, the WilderHill New Energy Global Innovation Index (NEX), the quoted index which charts the value of more than 80 of the world’s leading quoted clean energy companies, is up more than 30% on the start of the year:
ethanol :: biodiesel :: biomass :: energy :: sustainability :: renewables :: solar :: wind :: biofuels :: bioenergy :: investments ::
Qua volume, the leading sector of the industry for investment on the public markets during 2006 was solar, attracting $4.4bn – more than double the $1.7bn in 2005. Biofuels and bioenergy were the fastest growing sector with $2.5bn, which was more than 10 times the amount raised in 2005. Wind was relatively static, raising just $1.2bn worldwide on the public markets, against $1.1bn in 2005.
Specialist carbon market service providers, such as brokers and carbon fund managers, were the big losers in terms of public market fundings, raising only $67m in 2006, compared with $465m in 2005. Reasons range from the crash in the European carbon prices in April to the limited time before the Kyoto Protocol falls away in 2012 and the entry of large commodity and banking players into the market. Despite the lack of interest among public equity investors, the volume of money in specialist carbon funds powered ahead during the year, reaching more than $7bn by year end.
The hottest geographical market of the year was Frankfurt, where a total of 15 clean energy deals raised $2.6bn, including the $1.5bn IPO of Wacker Chemie, one of the global leaders in the production of solar silicon, a bottleneck commodity. NASDAQ registered 21 deals and $1.7bn in funds raised, while London’s AIM remained the favourite among smaller companies, attracting 29 clean energy deals worth a total of $1.2bn.
New Energy Finance has identified a healthy pipeline of IPOs for early 2007, with a record number of companies having filed registration papers or in discussions with advisors, suggesting that momentum will be strong into the New Year. Biofuels, solar and wind companies look set to continue to dominate the volume.
Venture capital and private equity investment looks set to top $7.0bn for the full year 2006, an impressive 167% increase on 2005. Growth was concentrated in private equity for expansion which soared in 2006 to $2.6bn, almost triple the $874m seen in 2005, with the cash mainly flowing into biofuels capacity.
There was significant growth in later stage venture capital deals, particularly series C, as investors chased exceptional returns. Over-the-counter and private investment in public equity (PIPE) deals showed similar growth. Early stage venture capital investment, including seed and Series A and B deals remained weak, however.
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