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Investment in clean energy tops 2007 record, despite market crash: United Nations

Emerging markets allocations soar as crisis dampens US investment.

Investors put $155bn into clean energy companies and projects worldwide in 2008, not including large hydro – a four-fold increase since 2004 – according to a report prepared for the UN Environment Programme’s (UNEP) Sustainable Energy Finance Initiative. Some $13.5bn of the new private investment went into companies developing and scaling-up new technologies, while the lion’s share – $117bn – was invested in renewable energy projects from geothermal and wind to solar and biofuels, according to New Energy Finance, the report’s authors. Despite the difficult financial market conditions during 2008 due to the global economic crisis, investment in clean energy still topped 2007’s record investments by 5%, in large part due to activity in China, Brazil and other emerging economies. Emissions trading in global carbon markets also grew by 87% during 2008, to reach a total of $120bn.
Achim Steiner, UN Under-Secretary General and UNEP executive director, said: “Without doubt the economic crisis has taken its toll on investments in clean energy when set against the record-breaking growth of recent years. Investment in the United States fell by two per cent and in Europe growth was very much muted. However, there were also some bright points in 2008,especially in developing economies: China became the world’s second largest wind market in terms of new capacity and the world’s biggest photovoltaic manufacturer and a rise in geothermal energy may be getting underway in countries from Australia to Japan and Kenya. Splitting out the year’s allocations to renewables, the report said that the wind sector attracted the highest new investment ($51.8bn, 1% growth on 2007), although solar made the largest gains ($33.5bn, 49% growth) while biofuels dropped somewhat ($16.9bn, 9% decrease). It said total transaction value in the sustainable energy sector during 2008 – including corporate acquisitions, asset re-financings and private equity buy-outs – was $223bn, an increase of 7% over 2007. However, capital raised via the public stock markets fell 51% to $11.4bn as clean energy share prices lost 61% of their value.
On a regional basis, clean tech investment in Europe in 2008 was worth $49.7bn (2% rise on 2007), and $30.1bn in North America (8% fall on 2007). Figures for clean tech investment in developing countries surged by 27% to $36.6bn, accounting for nearly one third of global investments, split mostly between China, India and Brazil.