Cleantech and Infrastructure

by Elliot Bradbrook

  • 22 Mar 2011
  • INF

The number of cleantech and renewable energy infrastructure funds closed increased relatively steadily between 2004 and 2008, when 20 funds reached a final close raising an aggregate $16.8bn.  The impact of the global financial crisis on the private equity industry was felt in 2009 when just 12 cleantech infrastructure funds closed during the year, although the aggregate capital raised increased to $17.6bn.  This can be attributed to the closure of the $8.8bn First Reserve Fund XII, which accounted for 50% of the capital raised in 2009.  The cleantech infrastructure market responded positively in 2010 with 17 funds reaching a final close attracting an aggregate $15.5bn in investor capital.

Riverstone/Carlyle Renewable and Alternative Energy Fund II is the largest pure cleantech infrastructure vehicle raised, closing in 2009 on $3.4bn.  The vehicle targets a range of global renewable energy assets in sectors including solar, wind, biomass, geothermal and hydro power.  The fund’s predecessor, Carlyle/Riverstone Renewable Energy Infrastructure Fund I, targets similar opportunities and closed in 2006 raising $685mn in investor capital.

There are 64 infrastructure and natural resources funds currently in market targeting cleantech and renewable energy opportunities, seeking $44.2bn in institutional investor capital.  55% are pure cleantech funds, while the remaining 45% target these assets as part of a diversified investment strategy.  Europe-focused funds are the most significant in terms of number and aggregate capital sought.  There are 25 Europe-focused cleantech and renewable energy infrastructure funds in market targeting $15.6bn, representing 35% of aggregate capital being targeted.  The largest pure cleantech infrastructure fund in market is Europe-focused ECP Renewable Energy Fund I, targeting commitments of €750mn.  There are 21 cleantech infrastructure funds primarily focused on Asia and Rest of World on the road and 18 North America-focused funds seeking $13.6bn and $15bn respectively.

In terms of project stage, the majority of cleantech infrastructure funds on the road invest in both the greenfield and brownfield stage of development.  This is unsurprising due to the increasing demand for new development in the sector.  73% of funds in market invest in greenfield projects, 72% make brownfield investments, and 43% target more established secondary stage opportunities.

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