Sunday, June 10, 2012

Underfunding green energy

Friday, I put up a post about how the guy who manages a $558 billion sovereign fund for Norway was complaining about how there is nowhere to invest.  Well, boo freaking hoo.  The whole world needs $trillions of investments in a sustainable infrastructure.  In fact, without such investments, the human race is probably doomed.  But you see, this guy isn't interested in investing.  He only wants to buy some paper guaranteed by some fraudulent ratings agency that returns 7% compounded.  He doesn't know how to invest in green infrastructure because he is too damn lazy to figure out how to invest in something new.  I am surprised he wasn't invited to the Bilderberg conference—he sounds like just the kind of anti-elite elite they want at their gatherings.

Red light for green energy in Latin America and the Caribbean

Lack of private investment in the natural resources of region means its vast potential to provide renewable power is untapped
Gavin O'Toole, 8 June 2012

Latin America and the Caribbean are failing to attract private capital to clean energy projects, raising questions about the extent to which market mechanisms can deliver sustainable development in the region.

The region lured less than 5% of the $260bn (£169bn) in new investment in clean energy projects and companies worldwide last year, according to Bloomberg New Energy Finance and the Inter-American Development Bank's multilateral investment fund (MIF).

A new business index called Climatescope was established by the market research company and the MIF to encourage private-investment identified green capital flows of $9.4bn – most of which was public finance from sources such as the Brazilian development bank, BNDES.

This is considered significantly below the potential of a rapidly growing region well endowed with natural resources and hungry for energy security – MIF sources suggest it is about half the level Latin America should be attracting – and challenges multilateral ambitions for private finance to drive climate change related investment.

Business commentators have long enthused about the region's potential for clean energy growth led by the private sector. It is home to areas of huge solar potential such as the Atacama desert, and has scores of sites for wind, hydro and wave power. Geothermal, biogas and biofuel energy is also viable in many areas.

However, market hurdles – from the availability and cost of local capital to the absence of supply chains for clean energy goods – are conspiring to leave its vast potential for green power untapped. Although microfinance has also emerged as an important way to help expand the access of low-income borrowers to cheap renewable energy, only 71 out of 448 microfinance institutions operating in Latin America and the Caribbean offer green products. more

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