Cleantech Investor

First published in Cleantech magazine, October 2010. Copyright Cleantech Investor Ltd 2010

Cleantech in the fast growth economies.

The feature in this issue, by Preqin, focuses on the growth of cleantech investment in emerging markets – which are more and more important for cleantech. We are increasingly observing interest in cleantech from the fast growth economies. Recently at Cleantech Investor, out of the four ‘BRIC’ economies (Brazil, Russia, India and China) we have focused on Brazil, in particular – in part because of its well established ethanol industry. In future issues of the magazine we’re planning to increase our coverage of cleantech in China and India. In this issue, Felicia Jackson’s column (page 45) looks at how China is addressing emissions reduction at the city level. In the fast growth economies, sustainable cities will play a key role – and we launch our cities research programme in this issue of the magazine.

The ‘BRICs’, of course, are only part of the story. We’ll shortly be travelling to Singapore, where we are partners for Singapore International Energy Week 2010, hosted by the Singapore Energy Markets Authority. Singapore has a strong focus on sustainability issues and cleantech generally – and is something of a hub for the Asian region in the field.

In Latin America, Brazil is not the only fast growth economy. We recently visited Colombia, which is experiencing rapid growth – and where there are opportunities to invest in biofuels, notably palm oil for biodiesel. Palm oil is farmed according to strict sustainability standards in Colombia and, unlike some South East Asian palm production, there is no evidence of deforestation for palm plantations. In Colombia, palm has been promoted by the Government as part of a reform programme, to encourage small farmers who were historically involved in producing cocoa, for the drug trade to switch to growing other crops. We’ll be including a feature on Colombia in a future issue of the magazine.

Also on the theme of Latin America, we recently attended a reception hosted by Pro Chile, the Chilean investment agency, on the occasion of the visit to London by President Piñera. That trip was scheduled – by coincidence – during the week after the dramatic rescue of the 33 trapped Chilean miners. Chile was, however, in the news earlier this year because of a story with a less happy ending – the tragic earthquake which cost many lives. In the short term, Chile is focusing on rebuilding its damaged infrastructure. I spoke to an architect at the reception who is advising the country’s health service on incorporating sustainable practices into the programme to rebuild the dozens of hospitals which were destroyed as a result of that disaster.

However, President Piñera pointed to the opportunity for Chile to join the ranks of the fast growth economies. Chile has already been identified as an attractive market for solar and wind energy and companies such as Mainstream Renewables are already active there. With its long coastline, Chile has massive wave energy resources. It also has substantial tidal energy resources in the south of the country. Given this marine energy potential, there is an obvious parallel with the British Isles, which may perhaps be manifested in greater trade links in the cleantech area in the future.

Meanwhile, in the UK, we are in the midst of the Comprehensive Spending Review announcements as we go to press. This issue of the magazine includes a feature on the role of the Feed-in Tarrifs for solar energy (page 14), which we understand will remain in place. One interesting development in the UK in the cleantech space has been a divergence of policy between the devolved countries. Scotland has a clear opportunity to move ahead in offshore wind – and the city of Aberdeen is positioning itself as a cleantech hub (see feature on page 14).

Cleantech is strong in the UK – and in established markets in Europe and increasingly in North America. But cleantech companies must not ignore the opportunities emerging in the fast growth economies!

Anne McIvor
October 2010