United Nations Environment Programme (UNEP) has reported that India has seen a 12% increase in investment in the renewable energy sector with an investment of $3.7 billion in 2008. The largest share was asset finance at $3.2 billion which grew by 25%. The clean renewable energy includes wind, solar, biomass and small-hydro projects. The major portion of investment has been made in wind energy sector. The investment in wind energy sector grew at 17% from $2.2 billion to $2.6 billion.
The investment in solar energy grew from $18 million in 2007 to $347 million in 2008. The major part of investment in solar energy has been spent for setting up module and cell manufacturing facilities.
The investment in small hydro projects grew about four-fold to $543 million in 2008.
The growth in biofuels fell by 80% from $251 million in 2007 to $49 million in 2008.
The venture capital and private equity remains a small piece of total clean energy investment in India, but saw a significant increase of 270% to $493 million in 2008.
In 2007, Indian companies began to explore foreign exchanges as a source of funds, raising $756 million on the Singapore Stock Exchange and London’s AIM, compared to $646 million on domestic exchanges. With the financial turmoil in 2008, both those funding avenues dried up with no money raised internationally in 2008 and only $74 million raised on Indian exchanges. Shriram EPC, an Indian wind turbine manufacturer and engineering firm, rose around $38 million in an IPO.
According to UNEP’s ‘Global Trends in Sustainable Energy Investment 2009,’ report, there was a four-fold increase in investment in green energy around the globe in 2008.
Mergers and acquisitions activities totaled $585 million in 2008, around the same level as in 2007. Most acquisition activity was biomass, small hydro and wind projects.
UNEP has reported that developed countries like US and those in Europe have shown poor growth because of economic crisis. The developing countries have shown major growth in clear energy investment.
Without doubt the economic crisis has taken its toll on investment in clean energy when set against the record-breaking growth of recent years. Investment in the US fell by 2% and in Europe growth was very much muted, said Achim Steiner, UN under-secretary general and UNEP executive director.