Europe Drives Growth In Cleantech Investment
Thursday, March 31, 2011

Research carried out for the 2011 Preqin Private Equity Cleantech Review shows that Europe is at the forefront of cleantech investment in the unlisted infrastructure market.

Preqin's research shows that 63% of cleantech and renewable energy deals completed by cleantech infrastructure managers have been made in assets based in Europe, while 38% of investors in cleantech infrastructure funds are also based in Europe.

Europe-focused cleantech and renewable energy infrastructure funds currently on the road are seeking an aggregate USD15.6bn, 35% of total capital being targeted for infrastructure cleantech.

According to the study, 64 new infrastructure and natural resources funds targeting cleantech and renewable energy projects are currently in the market worldwide, seeking a combined USD44.2bn. Of these funds, 21 are targeting Asia and Rest of World, and are seeking an aggregate USD13.6bn; 18 are North America-focused and are targeting USD15bn.

In 2010, an aggregate USD15.5bn was raised by 17 cleantech infrastructure funds which reached a final close, and 71 infrastructure cleantech deals were completed – an industry peak.

Public pension funds are the most prominent investors in cleantech infrastructure funds, accounting for 25% of all investors, the study shows. North America accounts for 25% of all deals while 12% have been made in assets located in Asia and Rest of World.

The cleantech and renewable energy infrastructure market has grown significantly over the past seven years, especially between 2007 and 2008 when the number of completed deals more than doubled.

Elliot Bradbrook, Manager, Infrastructure Data at Preqin said that it is "unsurprising" that the industry is particularly advanced in Europe because all governments are bound by the 20:20:20 agreement – which commits European Union member states to a reduction in EU greenhouse gas emissions of at least 20% below 1990 levels – and are offering strong incentives for development of clean technology and renewable energy solutions.

"Growth within the sector looks set to continue, as investors seek to make profitable commitments to environmentally friendly projects," Bradbrook observed.