Raising capital for renewable energy development, technology more challenging as economies languish, but not in countries such as India, where power deficit is spurring industry growth even without government subsidies, says fund manager
August 19, 2011
– Even without government subsidies, renewable energy development is robust in India due to growing consumer demand and a power deficit, said a principal in a London-based firm that manages funds with energy and recycling assets, reported Reuters on Aug. 19.
Raising capital for some environmental technology firms in some other parts of the world, though, has become more difficult as economies have started to show signs of possibly dipping into recession, said Vivek Tandon, co-founder of Aloe Private Equity, in an interview.
Aloe Private Equity manages €175 million (US$253 million) of assets under three funds, with an investment portfolio that includes 11 companies that are primarily involved in energy efficiency, renewable energy and recycling, Reuters reported.
Over the past month and year, clean tech stocks have under-performed wider global stocks. Some companies in the sector are facing financial problems and investment is waning. A large number of institutions, however, remain interested in the sector, noted Tandon.
In India, the returns remain “very good,” said Tandon, adding that the advantages offered in the country outweigh the difficulty in getting projects started because of India’s bureaucracy, reported Reuters.
Wind, run-of-the-river hydro and biomass are already being introduced in India at grid-parity without government subsidies, although solar power has not yet reached that point, said Tandon.
Aloe Private Equity aims to raise €300 million to €350 million to develop environmental technologies in Asia, with 60% of the capital going to India, 20% to China and 20% to other growing countries in Asia, Reuters reported.
The fund that launched in May to raise this money is to close at the end of December, and the company expects it will secure commitments of €100 million by that time, said Tandon.
Aloe Private Equity sold one-third of its share in India-based clean energy company Greenko Group PLC last November but still holds a 13.7% stake. In June, Greenko raised £50 million (US$82 million) in a share placing. It plans to expand its renewable power capacity fivefold by 2014, reported Reuters.
The primary source of this article is Reuters, London, England, on Aug. 19, 2011.