Clean Investor, July 19: institutional investors back new low carbon bond group

RI’s regular Tuesday review of clean investing news

The Low Carbon Bond Group – which will explore capital market solutions for funding the low carbon sector – has been formed by a group of leading names including the Institutional Investors Group on Climate Change (IIGCC), the European Investment Bank, accounting firm KPMG, ratings house Moody’s Investors Service and law firms Norton Rose and Clifford Chance. “We are looking forward to working with other stakeholders on LCBG in order to better understand the low carbon bond investment opportunity and to solve important issues of liquidity, pricing, size and duration,” said IIGCC Executive Director Stephanie Pfeifer.

The UN Environment Programme and the Frankfurt School of Finance & Management have launched a new Collaborating Centre for Climate & Sustainable Energy Finance. Its goal is to develop cost-effective ways to reduce carbon emissions by mobilising sustainable energy investments. It will work with financial institutions to “develop technical know-how, innovative financing approaches and new forms of entrepreneurial and end-user finance”. UNEP said cleantech investments rose 32% globally in 2010 compared to the previous year, driven by Chinese wind farms and European rooftop solar panels.

Bank of America says it has invested $11.6bn in solar and environmental projects as part of a larger $20bn, 10-year Environmental Business Initiative since 2007. The figures came in the bank’s first Corporate Social Responsibility Report.

Julius Baer, the Swiss private bank, has launched a new service which enables investors to reduce or fully neutralise CO2 emissions of their equity investments. The new offering, Green Portfolio Services, has been developed with Zurich-based emission reduction company South Pole Carbon. It’s said to be the first offering of this type to be offered by a financial institution.Reinsurer Munich Re and private equity firm KKR have bought 49% of Spanish photovoltaic firm T-Solar’s Spanish and Italian solar parks, comprising 168MW of capacity, for an undisclosed sum. Munich Re bought 37% via its MEAG Munich Ergo Asset Management GmbH arm. T-Solar statement

The lack of attention being paid to “out of control” carbon debt has been highlighted by Mindy Lubber, president of Ceres, the coalition of investors and environmental groups. In a blog post, she cited a report from the Economics and Equity for the Environment (E3) network which found that each ton of carbon dioxide emitted into the atmosphere causes up to $893 in economic damages, far greater than current estimates of $21.

Cleantech venture investment fell 33% in the second quarter of 2011 compared to the first quarter, according to research firm Cleantech Group. It said investment was also 10% lower than the second quarter of 2010. And the number of deals (161) was also down on the 174 recorded in the first three months. Report

Research firm Solarbuzz says expenditure on equipment to make photovoltaic solar products will “decline sharply” in 2012 after the growth in 2010 and 2011 that created oversupply of panels. Spending on crystalline silicon and thin-film products will slip 47% to $7.6bn, the California-based firm said.

Israel’s government has approved a plan to source 10% of the country’s electricity from renewable sources by 2020, according to reports. The cabinet set a target of 1,550MW from renewables by the end of 2014 and 2,760 MW six years later, Reuters reported.

The amount invested in solar projects in the second quarter of 2011 – $15bn – exceeded wind project financing for the first time, according to industry tracker Clean Energy pipeline. It said clean energy companies secured $4.6bn on the public markets globally in the period, a more than 20% decline on prior year period. Report