Global investment in clean energy production, distribution and storage is set to rise sharply to meet the COP 21 Paris goals. To meet these goals, the world will need to raise nearly one trillion dollars in new investment annually. Currently, it is only around $300bn (IEA) (BNEF).
The majority of clean energy investment is now in emerging markets, with government determined fixed subsidies being phased out in favour of auction pricing. The maturing of technologies and lasting availability of low cost finance is generating increasing corporate M&A, portfolio aggregation and refinancing. Coupled with falling battery storage costs, new business models are opening up for clean energy production and grid services throughout the developing world.
Private equity and structured finance solutions are permeating the global financing of clean energy expansion. But any increase in cross border portfolios will necessitate a more sophisticated risk management