MONACO (Reuters) - Booming global investor interest in an emerging industry to supply clean energy alternatives to fossil fuels, such as wind and solar, has temporarily peaked in the wake of a widespread credit squeeze, a U.N. official said.
Investment by major, institutional investors such as banks and pension funds soared 229 percent last year in technologies that produce and store low carbon-emitting renewable energy or that cut waste, on the back of rapidly rising concern about global warming and government support to combat it.
But such investments may not hit such peaks this year as investors withdraw money generally from financial markets lacking confidence after failing, sub-prime mortgage repayments fed a cycle of credit pullbacks by lenders.
“You can already see the consequences of sub-prime, a lot of money coming out,” said Paul Clements-Hunt, head of the United Nations Environment Program’s Finance Initiative.
“You did have a spike effect last year. It will plateau at a higher level and for decades,” he added, reflecting widespread enthusiasm for the long-term future of the renewable energy sector.
Clements-Hunt was speaking at a “CleanEquity” conference in Monaco organized by corporate finance advisers Innovator Capital.
Solar stocks particularly fell in January in the wake of investor fears that these were overvalued, but the effects of sub-prime had hit the clean tech sector generally.
An exchange-traded fund that tracked the biggest 30 clean tech stocks worldwide by market cap dropped more than 30 percent in the first three weeks of January, said Jean-Marc O’Brien of Ardour Capital.
“Investors have to be nimble,” he said on the sidelines of the conference.
But specialist fund managers remained confident in the clean energy sector at a time of rising interest in climate change and spiraling oil prices.
“I can’t say I’m serenely confident, but I can sleep at night ... it’s only going one way,” said New Energy Fund’s Mark Cox.
The CleanEquity conference closed on Thursday with awards designed by British artist Damien Hirst and presented by Monaco’s sovereign Prince Albert II for the three most innovative of 48 presenting companies.
Reporting by Gerard Wynn, Editing by Timothy Gardner and Matthew Lewis