Environment: Jan 24: Allianz’s Faber: Just 1% of institutional assets is 5x green climate fund

RI’s regular round-up of environmental investing developments

Joachim Faber, member of the administrative board of Allianz Investment Management, says that if just one percent of the $55,000bn currently invested in life insurance and pension funds globally could be activated each year for climate-protection projects, the $550bn raised would be five times more than the Green Climate Fund approved by the Durban climate conference is to invest every year in developing countries beginning in 2020. Text Here In an interview with Allianz’s in-house magazine, Faber said governments or international development banks, including the World Bank, the Asian Development Bank or the African Development Bank, should issue long-term guarantees for such investments, particularly in developing countries where the willingness to invest has been restricted by rapid changes of government, proclivity to corruption or high inflation.
He said countries could tax the interest generated by such “climate bonds” at lower rates than that of other investments. Another key requirement, he said, was a purchase guarantee for renewable energies as per Germany’s Renewable Energies Act: “This would mobilize private capital for energy change – and would be much cheaper for a government than if it had to make the necessary investments itself.” 

A ‘leading UK pension fund’ has acquired a 64MW portfolio of UK landfill gas assets, according to asset management firm Capital Dynamics. The portfolio consists of 35 operating sites that sell renewable electricity under long-term sales contracts with government agencies and energy suppliers, said Swiss-based firm said. Financial details were not disclosed. Link

Baillie Gifford, the Edinburgh-based fund manager, has disclosed a holding of 4.6m shares in Nasdaq-listed Arizona-based solar photovoltaic manufacturer First Solar – giving it a 7.5% stake. Last month First Solar named Christopher Burghardt as Head of Sales Operations for Europe, replacing seven-year company veteran Stephan Hansen.

Crédit Agricole Private Equity has entered the German solar photovoltaic market, via a €10m investment by its Capenergie 2 fund into PV firm Abakus Solar. The bank says Abakus “has the potential to become one of Europe’s leading photovoltaic companies”.

Investors have welcomed a bond issue from German utilizes giant RWE aimed at raising finance for its “ambitious” offshore wind farm plans. The £600m (€717m), 22-year sterling denominated issue was “significantly oversubscribed”, the Essen-based group said.

Corporate bonds that are issued by companies generating electricity from renewable sources may get preferential treatment, according to a Japan Times report citing government sources. It said the authorities may revise regulations to help foster solar, wind and other forms of clean energy.

Allianz Renewable Energy Partners IV Ltd., the investment fund, has bought two French wind farms – with a combined installed 16MW capacity – from developer Gamesa. The two sites are in the Poitou-Charentes and Lorraine regions; the terms of the deal were not disclosed. Link

The executive board of the Clean Development Mechanism has published its 2011 annual report. It shows the CDM continued to grow in 2011, with over 3,500 registered projects currently, in 72 countries, and over 3,600 projects in various stages of the registration process. Link

The Malaysian Life Sciences Capital Fund has led a new round of investment in Illinois-based biofuels outfit LanzaTech. LanzaTech said it has closed a $55.8m round of financing and added that new investors included Malaysian state oil giant Petronas’ venture arm. Existing investors Khosla Ventures, Qiming Venture Partners and K1W1 also participated. Link*Impax New Energy Investors II,* a clean investment fund managed by funds firm Impax Asset Management, has acquired a 9MW portfolio of operational solar photovoltaic plants in Italy from developer Scatec Solar. The purchase consists of eight projects in Puglia and a 1MW project in Sardinia. “All projects are operational, and with non-recourse bank financing of close to €34m provided by DNB Bank,” the companies said.

The Norwegian government will reportedly spend NOK1.8bn (€240m) annually to help give the world’s poor access to energy and develop a market-based systems to limit carbon emissions. The initiative is called the Energy+ Partnership and also involves other developed nations such as the UK, France, Denmark, Switzerland, Netherlands and South Korea. Target nations will include Bhutan, Ethiopia, Kenya, Liberia, the Maldives, Morocco, Nepal, Senegal and Tanzania, according to a Point Carbon report.

Let’s “break the vicious cycle of policy and action” – that was the plea from Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) at the World Future Energy Summit in Abu Dhabi last week. “Help us convert it into a virtuous cycle of action that can power new growth, help alleviate poverty and boost policy-makers’ confidence that the private sector is geared up for the low-carbon world,” the UN’s top climate official said in her address.
South Africa’s Nedbank Capital has teamed up with the Face the Future carbon offsetting group to develop sustainable forestry projects in Africa. They have singed a Memorandum of Understanding to “facilitate future collaboration between the two companies with the sole intention of enabling them to jointly develop sustainable forestry projects in Africa”. Link
A group of South Korean investors is looking to set up a biomass plant in Sarawak, the Malaysian province, according to local media reports. Under the plan from green finance firm Eco-Frontier, waste from palm oil plantations could be turned into biomass pellets to generate electricity, the reports stated.

Société Générale’s SRI equity research team says the key ESG risks of hydraulic fracturing are water needs and water stress, potential contamination of groundwater, and surface water and soil/land pollution. In a report identifying the most ‘at-risk’ companies of fracking risks it said other potential concerns included greenhouse gas issues, seismic disturbance and operational health & safety issues such as blow-outs.

Bonds issued by Japanese renewable energy electricity companies could get preferential treatment as the government tries to boost the renewables sector, reports The Japan Times, citing government sources. Under the plans, Japan’s Electricity Business Law would be revised to give corporate bonds from green power companies a repayment priority over other unsecured debt.

The Luxembourg Fund Labelling Agency (LuxFLAG) has opened the second application process for the LuxFLAG Environment Label for investment funds.
The label looks at procedures for screening investments and potential investments as well as management of Environmental, Social and Governance (ESG) practices.

Barclays Capital, the investment banking arm of the UK bank, has closed its US emissions trading desk in New York according to a Reuters report citing Kedin Kilgore, the former head of US Emissions Trading at the bank. It said he has left to explore other opportunities. It quoted him as saying the team had good support from management but the current economic conditions and the uncertain regulatory environment made it very difficult.