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Brazil:BM&FBOVESPA Exchange news and events November 2009

BM&FBOVESPA presents its new Corporate Sustainability Index (ISE) Portfolio

The new Corporate Sustainability Index (ISE) portfolio, which comprises shares issued by companies recognized for their high level of commitment to sustainability and social responsibility, will enter into effect on December 1st, 2009 and will be valid until November 30th, 2010. It contains 43 shares issued by 34 companies that represent 15 sectors and a market capitalization of BRL 730 billion, which corresponds to 32.21 % of the total market capitalization of all the companies listed on BMFBOVESPA (on 11/24/2009).

Three industry sectors have been included in this year’s portfolio: civil works, insurance, and machinery and heavy equipment. Of the 28 companies that composed the previous portfolio, 26 been reselected. The eight companies that were included are: Copel, Even, Itausa, Indústrias Romi, Redecard, Sul America, Usiminas, and Vivo. The previous ISE portfolio contained 36 shares issued by 28 companies from 12 different sectors. Aiming to reduce industry segment concentration, the new portfolio contemplates changes to the index’s methodology, which now limits sector participation to 15%. The previous methodology permitted up to 25% participation per company.

BM&FBOVESPA forms Real Estate Market Advisory Committee

BM&FBOVESPA has launched the Real Estate Market Advisory Committee, which aims to counsel the Exchange on matters concerning this segment, including the development of financial products based on real estate assets. The committee is composed by 20 real estate industry specialists, representing regulatory agencies, companies, entities, financial institutions, and law firms.

BM&FBOVESPA launches new website

The Exchange has launched its new integrated website, With a totally renovated design, the portal brings information about the Exchange, its markets, products and services, and regulation.

The website is available in English, Portuguese, Spanish, and Mandarin.

Exchange Traded Funds (ETFs) volume increases in 2009

BM&FBOVESPA offers ETFs that track the performance similar of IBOVESPA, IBR-X 50, Mid-Large Cap Index and Small Cap Index, indexes developed and calculated by the Exchange. These four instruments were issued and are managed by renowned institutions like the Brazilian Development Bank (BNDES) and Barclays Global Investors Brasil (BGI Brasil). They represent an alternative investment strategy for both local and international participants, providing investors with efficiency, transparency, flexibility and arbitrage opportunities. Options on BOVA11 are also available, as well as other BVMF Index futures products.

Index Fund (ETF) Underlying Index Tracks… Ticker
PIBB IBrX-50 Fifty most liquid shares of the cash market PIBB11
iShares Ibovespa IBOVESPA Companies representing 80% of the total trading value BOVA11
iShares MidLarge Cap MLCX Companies representing 85% of the total market value MILA11
iShares Small Cap SMLL Remaining companies not included in MLCX SMAL11

From January to November 24, 2009 the trading activity of ETFs in BVMF totaled BRL 3.89 billion, 136% more than the value traded in 2008. Among these four securities, ETF BOVA11 has obtained the highest financial volume this year, with BRL 3.28 billion, and 32,890 trades.

Exchange creates Institutional Participant Relations Department

The goal of the new department will be to expand the sales activities relating to the segment of fund managers and institutional clients, including pension funds. This is an important step in consolidating BM&FBOVESPA’s strategy to expand its client base.

To head the new department, the Exchange has appointed Mr. José Antonio Gragnani as Institutional Participant Relations Officer. Mr. Gragnani has vast experience in the financial and government sectors

BM&FBOVESPA appoints new sustainability officer

The Exchange has appointed Ms. Sonia Favaretto to head its Sustainability Department. The principal mission of the department is to increase BM&FBOVESPA’s philanthropic activities, social responsibility programs, and stimulate employee participation of such projects.

Ms. Favaretto has a broad professional experience in the area of corporate social responsibility, having worked at Itaú Unibanco Bank and the BankBoston Foundation.

BEST Brazil road show meets Asian investors

The BEST – Brazil: Excellence in Securities Transactions road show promoted the Brazilian financial and capital markets to Asian investors, from November 23 to 26. Approximately 250 people attended the event, which visited Hong Kong, Tokyo, and Seoul, besides clients of local financial institutions that organized ten one-on-one meetings with BEST Brazil officials

During the event, representatives from ANBIMA, BM&FBOVESPA, and FEBRABAN conducted seminars on the Brazilian capital markets, especially the equities products available as investment opportunities. The Brazilian Market Profile is a comprehensive and in-depth analysis for international investors and was distributed at the road show.

BM&FBOVESPA announces earnings for third quarter of 2009

Net income of BRL 245.8 million increased 4.3% year-on-year, whereas adjusted net income of BRL 337.3 million rose 6.8% over adjusted pro forma net income for the three-month period to September 2008. 3Q09 net revenues of BRL 383.0 million contracted 6.5% from the same quarter one year ago. In a comparison of the nine months to September 2009, net revenues dropped 13.8% to BRL 1,077.8 million.

3Q09 operating expenses reached BRL 132.5 million, a 4.0%

decline from one year ago. As adjusted by items with no impact on cash flow, such as depreciation and the employee stock options plan, operating expenses for the quarter amounted to BRL 109.0 million, a 16.2% retreat from adjusted expenses for the same period one year earlier, and in line with the BRL 450.0 million target for 2009.

EBITDA totaled BRL 262.0 million for the third quarter, down 6.3% from 3Q08, and BRL 698.7 million for the nine months to September 2009, a year-on-year drop of 18.2%. The EBITDA margin kept a flat line in a comparison of the quarters to September 2009 (68.4%) and September 2008 (68.3%).

DMA trading volumes increases during the month of October

In October, Direct Market Access (DMA) trading of the derivatives market segment at the Brazilian Securities, Commodities and Futures Exchange – BM&FBOVESPA reached a total of 10,438,031 contracts traded, with 1,210,689 trades carried out through the GTS trading platform. In September, the total was 7,800,461 contracts traded in 731,377 trades. The volumes registered by access modality in October in comparison to the previous month are as follows:

Traditional DMA
5,590,649 contracts traded, in 516,459 trades, in comparison to 4,649,846 contracts traded and 455,580 trades;

Via DMA Provider
1,356,018 contracts traded, in 36,414 trades, in comparison to 1,217,992 contracts traded and 25,793 trades;

DMA via order routing with CME Globex (CME Group’s electronic trading platform)
3,246,598 contracts traded, in 617,938 trades, in comparison to 1,785,549 contracts and 233,953 trades.

DMA via co – location
244,766 contracts traded, in 39,878 trades, in comparison to 147,074 contracts traded, in 16,051 trades.

BM&FBOVESPA market performance – October 2009

BM&F Segments
Derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 34,670,732 contracts and BRL 2.38 trillion in volume in October. That compares to 31,505,077 contracts and a volume of BRL 2.12 trillion in September. The daily average of contracts traded in the derivatives markets in October was 1,650,987, compared to 1,500,242 in the previous month.

Financial Derivative
Interest rate futures (ID) totaled in October 12,104,485 contracts traded, in contrast to 12,469,090 in September. The US dollar futures ended the month totaling 7,033,995 contracts compared to 5,959,815 contracts in the previous month. The Ibovespa futures traded 2,304,720 contracts in September, compared to 1,443,420 in the last month. The Euro futures contract (EUR) registered 14,970 contracts, in contrast to 5,330 contracts in September.

Agribusiness Derivatives
In October, the BM&FBOVESPA agribusiness derivatives market (including futures and options) totaled 197,101 contracts traded, compared to 151,582 in September. Agribusiness markets totaled 61,356 open interest contracts at the end of the last trading day of October. In September, these contracts totaled 74,238.

BOVESPA Segments
In October, equity markets (Bovespa segment) registered historic marks in financial volume daily averages, which totaled BRL 7.34 billion, with 436,250 trades. The October volume was BRL 154.25 billion, with 9,161,252 trades. Home Broker, a web-based equities trading system, set six trading records, and reached its highest trading volume ever with BRL 60.99 billion and the number of individual investor accounts came to 555,768 for the first time.

Source: BM&FBOVESPA, 01.12.2009


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China and India – Himalayas, Water and growing conflicts

The brewing disputes and growing concerns of the Himalayan Region by worlds two most populus nations, is a further indication of increasing dangers of latent resource wars, particularly on water. The continuing desertification in China and migration to coastal region increase pressure. While planned deviation of water ways to Chinese low lands could severely affect South- and South East Asia, see also

Political Hands across the Himalayas, FT, 15.11.2009

Excerpt: India and China are touted as white knights coming to the rescue of the world economy. Considerable hope rests on these two countries, with fast-paced growth, developing domestic markets and high savings rates, reviving demand and leading other languishing parts of the world out of recession.

The two rising powers, however, may yet be clashing knights. For in New Delhi it is fear of Beijing, rather than partnership, that all too frequently characterises the trans-Himalayan relationship. While some size up trade balances and growth trajectories, others are measuring missile ranges and comparing military parades.

Mr Mishra advised Atul Behari Vajpayee, the former premier. His views, albeit hawkish, are respected by the current Congress party-led government and carry weight with the diplomatic community.

So his recent forecast that India might face a second military front within five years turned heads. The former intelligence chief predicted that India could find itself locked in an armed stand-off simultaneously with Beijing and Pakistan, the traditional rival.

Mr Mishra’s suspicions of China have been newly aroused by Beijing’s warm relationship with Islamabad and its supply of military hardware to Pakistan’s army.

They have also been stoked by territorial claims to Arunachal Pradesh, a north-eastern Indian state, and predictions on Chinese websites that India, a country of huge diversity, is doomed to fall apart.

Mr Mishra says China’s stridency in its territorial ambitions has grown over the past two years to a level not seen since the early 1960s. Moreover, he accuses China of trying to bring into question India’s sovereignty over the state at the international level.

Military strategists interpret China’s policies as a regional power play. They say that tying India up within its own borders prevents it from projecting itself in the region and rivalling China.

In spite of the fighting talk in India, the relationship between India and China holds much more potential than antagonism. China’s impressive record of infrastructure development and lifting people out of poverty holds lessons for India. Likewise, India’s democratic credentials and inclusiveness are instructive to China.

Read full article hear:  15.11. 2009 by James Lamont in New Delhi

The high stakes of melting Himalayan glaciers, CNN 05.10.2009

Execerpt – The glaciers in the Himalayas are receding quicker than those in other parts of the world and could disappear altogether by 2035 according to the 2007 Intergovernmental Panel on Climate Change (IPCC) report. The result of this deglaciation could be conflict as Himalayan glacial runoff has an essential role in the economies, agriculture and even religions of the regions countries.

Satellite data from the Indian Space Applications Center, in Ahmedabad, India, indicates that from 1962 to 2004, more than 1,000 Himalayan glaciers have retreated by around 16 percent. According to the Chinese Academy of Sciences, China’s glaciers have shrunk by 5 percent since 1950s.

Dr. Vandana Shiva, an environmental activist, physicist and leader in the International Forum on Globalization, has just returned from a “Climate Yatra,” a research journey to the Himalayas to study the impact of climate change and the glacial melt upon communities in Asia.

“Himalayan rivers support nearly half of humanity,” Dr. Shiva told CNN. “Everyone who depends on water from the Himalayas will be affected.”

Both India and China are exploring opportunities to harness Himalayan waters for hydroelectric power projects, and while the initial melt promises to provide plenty of water for both sides, the loss of glaciers could lead to water shortages further in the future.

Water-related conflicts have already been witnessed in other parts of the globe such as in the West Bank and in Darfur.

According to Himanshu Thakkar of the South Asia Network on Dams, Rivers and People, almost 70 percent of the non-monsoon flows in almost all the Himalayan rivers come from glacier melt.

International water security issues within Asia could be likely since the waters of the Indus, Ganges and the Brahmaptura basins flow into China in the upstream, and are shared across South Asia in the downstream.

Dr. Shiva believes the situation will render major security issues, between India and China particularly, as flows reduce and demands intensify.

Read full article here: CNN, 05.10.2009

In retreat: the roof of the world is experiencing rapid summer melting.


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China:Wind Power Dilemma: Money Blows Away

Rapid, government-subsidized expansion of China’s wind power industry has led to excess capacity and investment waste.

(Caijing Magazine) A cold front swept across northern China’s Inner Mongolia region in early November, forcing a wind energy farm at Xilin Gol to curtail operations – even as a brisk breeze whistled through idle turbine blades.

“When that much wind is moving through, the generators can’t make electricity,” explained Ma Zhanxiang, vice president of the Inner Mongolia Electric Power Industry Association (EPIA). “Money just blows by.”

The turbines were forced to shut down not because the Mongolian wind was too strong, or for mechanical reasons, but because the system for distributing power from Xilin Gol and other wind farms built in recent years in northern China is simply too weak.

When cold weather arrives, wind farms have to compete for transmission space on a power distribution grid buzzing with electricity generated by the region’s coal-fired thermal heating plants, which fire up in winter to supply heating for local residents as well as electricity.

According to EPIA, Inner Mongolia’s installed wind power capacity approaches 3.5 gigawatts, and currently nearly one-third of that is sitting idle. The remaining two-thirds capacity is supplied by turbines that run erratically, shutting off and on according to demand.

“Wind power is too concentrated” in certain regions of China including Inner Mongolia, Ma said. “When there is wind, wind power plants need to generate electricity. But power grids get overwhelmed.” And that wastes money. Nationwide, some 5 million gigawatts of wind power generating capacity never made it to the grid during the first half of 2009. Since wind farm construction costs some 10,000 yuan per kilowatt, the total idle investment is worth about 50 billion yuan.

“The winter wind blows hard, but things aren’t easy for wind power,” Ma told Caijing.

Outside Inner Mongolia, wind power capacity is unevenly spread across sections of Gansu Province in the northwest, Heilongjiang and Jilin provinces in the northeast, and coastal areas such as Jiangsu Province.

With the exception of Jiangsu wind farms, most of the nation’s wind energy operators concentrate power generation at a grid terminus or in areas with high concentrations of thermal plant capacity. And factors such as local market demand, power grid links, wind farm expansions and capacity peaks contribute to the fact that equivalent full load hours (EFLH) are relatively rare for wind farms. An EFLH is equal to an annual power load divided by installed capacity.

Various experts have started weighing in with suggestions for reducing overcapacity and streamlining wind energy in China, which is government subsidized. For example, State Council researchers recently called for a “systematic” approach to promoting healthy development of the industry.

“Overcapacity in areas of high wind power concentration cannot be ignored,” a China Electricity Council (CEC) expert told Caijing.

Idle Power

Production restrictions at wind farms have become all too common. In the first half of the year, for example, nearly 150 million kilowatt hours of generated power went unused in the Guazhou and Yumen areas of Gansu because the grid could not absorb the power they produced. This represented 27 percent of Guazhou’s and 33 percent Yumen’s actual wind power production.

To better understand problems with power capacity loss and grid restrictions, a joint study was launched in June by the Society of Electrical Engineering’s Wind Power Committee and Tidal Power Committee. Investigators found power restrictions affecting 48 wind farms operated by the country’s seven largest wind power developers, which supply 50 percent of the nation’s wind power.

Installed capacity at affected wind farms totaled 4.4 million kw at the end of 2008, or more than 70 percent of the 6 million kw installed capacity at all plants operated by the seven companies. Grid restrictions cost 370 million kwh in lost power in 2008, which is an amount equal to 103 EFLHs.

Since these seven largest wind power developers supply 50 percent of the nation’s wind-generated electricity, grid restrictions could mean wind power losses in 2008 were as high as 740 million kwh nationwide, or close to 6 percent of the national wind power generating capacity of 12.8 billion kw. In the first five months of 2009, losses were about 620 million kwh – an EFLH of 140 hours, or more than 200 hours on an annual basis. As a result, electricity use restrictions through 2009 were expected to be even more pronounced, and could result in losses of more than 2 billion kwh for the full year.

National Development and Reform Commission (NDRC) data illustrates the seriousness of idle wind power capacity. From January to September 2009, NDRC said, wind farms with generating capacity of at least 6 megawatts produced 18.2 billion kwh of electricity nationwide – up 117 percent over the same period 2008. But that was only about 0.45 percent of all the electricity churned out by China’s major power plants, and was significantly less than wind power’s proportion of total installed capacity, which is 1.15 percent.

SOE Factor

Why is China suffering from imbalanced wind power capacity? Some point a finger at the state-owned enterprises (SOEs) that build and operate wind farms.

“Most wind power projects are owned by SOEs, while wind power equipment makers are mostly private and foreign-funded enterprises,” a CEC expert told Caijing. “This is an interesting phenomenon, and to a certain extent reflects the problems of wind power.”

CEC research said nearly all of China’s wind power producers are state-owned. In the seven provinces with major wind power development projects, central SOEs comprise 73 percent of the 92 wind power companies and control 81 percent of total installed capacity.

China began large-scale wind farm construction in 2005, and this year NDRC began arranging bids for wind power concessions. So far, bids have been completed for 15 projects, with each slated to provide more than 10 gigawatts.

Wind power is considered a crucial path for power industry SOEs seeking to expand installed capacity. And it’s a path encouraged by the government. For example, a worker at state-owned China Power Investment Corp. (CPI) told Caijing the government plans to more strictly control additional, large-scale thermal energy projects over the next two years. And the government has refused to approve any new major hydropower projects for the past two years.

“State-owned power generation companies are now striving to expand installed capacity through wind power,” the CPI worker said.

Moreover, wind power is the biggest recipient of 4.5 billion yuan in renewable energy subsidies that the government finances by adding an extra 0.002 yuan charge to each kilowatt of electricity sold nationwide.

The National Energy Board announced plans early this year to raise the wind power generation goal to 20 million kw next year and 100 million kw by 2020. The board also ordered the construction of wind power bases exceeding 10 megawatts in Gansu, Inner Mongolia, Jiangsu and Hebei Provinces within 10 years in accord with a government policy calls “build large bases, integrate with the grid.”

Meanwhile, turbine manufacturers are seizing opportunities by bumping up production capacity. According to statistics from Li Junfeng, deputy director of NDRC’s Energy Office, China today has more than 70 wind power equipment manufacturers, up from six in 2004. Installed capacity has also grown 25-fold, from 468,000 kilowatts in 2002 to 1.2 gigawatts at the end of 2008.

Too Much

But all that capacity is not necessarily indicative of a healthy industry. A glut of built turbine manufacturing plants and wind farms means too much wind power capacity for the demands of the grid.

Inner Mongolia’s situation is a clear example. Its installed capacity – 50 gigawatts — is the country’s largest, but the excess at wind farms has reached a crisis level. EPIA counts some 10 gigawatts in the region, including 3.49 gigawatts of wind power, as excess installed capacity.

Nevertheless, more power is on the way in Inner Mongolia: Projects representing hundreds of thousands of kilowatts in additional capacity are currently under construction.

Thermal power units provide much of the electricity that powers Inner Mongolia, raising unique challenges for its wind farms. For example, power grid scheduling is difficult, since the regional grid lacks the hydropower and natural gas power plants that help grid operators adjust power feeds when necessary to counteract the relative instability of wind power supplies. Rather, according to a wind power plant staffer in the region, grids can only rely on thermal power.

Additionally, field operations of wind power technology are not as simple as they look. Even China’s leading wind generator enterprise Goldwind (SZSE: 002202) cannot guarantee, from a technical perspective, that its turbines can operate in all weather.

New Ideas

China’s fast-growing renewable energy industry experienced a “policy braking” in August, when a State Council executive meeting chaired by Premier Wen Jiabao concluded the industry “tended toward excess” and needed a little cold water. A few days later, the 2009 List of Encouraged Imported Technologies and Technology Products was released by NDRC along with the ministries of commerce and finance. It removed import subsidies for polysilicon and wind turbines exceeding 2 megawatts.

On the sidelines of a recent hydropower development forum, National Energy Secretary and NDRC Vice Chairman Zhang Guobao was asked by Caijing to express his views on overcapacity in the alternative energy industry. Zhang evaded the question but said, “The State Council already has policies aimed at the overcapacity issue.”

At a State Council Information Office press conference in late September, Zhang said excess capacity was restricted to wind power equipment and did not extend to the wind power generation industry. “No one is sending out the message that China has too much wind power and needs to cut back,” he said.

Although a large amount of wind power never makes it to the grid, many local governments and enterprises are pushing ahead with zealous wind energy plans while SOEs turn to wind power for expanding installed capacity.

The government’s subsidies for alternative energy make this “equivalent to the state footing the bill for local governments and enterprises” to develop wind projects, said Fan Bi, deputy director of the Research Office of the State Council. Therefore, he said, existing subsidies and financial resources are relatively adequate for wind power development.

Fan has suggested China seek new ways to develop wind power. For starters, he thinks subsidy transparency should be improved, with monetary sources clarified, to prevent blind development. Second, concession bidding should be continued to distribute subsidies effectively and reduce on-grid wind power prices through competition. Eventually, the state could reduce subsidies and support for wind power.

The report also recommended China strengthen its wind power development plan, determine a reasonable scale for the industry, and reform the government approval process for wind power projects.

But other experts say wind power adjustments cannot be separated from China’s power industry reform, which is ongoing.

“There is still a fundamental need to deepen power industry reform,” an expert at the State Council Research Office told Caijing. “First, a separate pilot for transmission and distribution should be implemented, and work should be done on allowing grid companies to independently set prices, moving management of distribution network assets to the provincial level.

“In this way,” the expert said, “systematic reforms can be used to eliminate wind power overcapacity.”

Source: Cajing, 12.11.2009 By staff reporter Li Qiyan


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Global warming threat for Asia financial hubs – Yangtze ‘facing climate threat’

The report, produced by WWF, the environmental pressure group, puts the two financial hubs in the top 10 cities threatened by climate change in Asia, the region widely believed to be most vulnerable to rising global temperatures.

It warns that Hong Kong is in danger from higher sea levels, which are likely to rise 40cm-60cm in China’s Pearl River delta by 2050, increasing the area of coastline that is vulnerable to flooding by up to six times.

Costs imposed by typhoons are also likely to rise dramatically, the report says, noting that 14 of the 21 extreme storm surges between 1950 and 2004 occurred after 1986.

The number of nights when Hong Kong temperatures rise above 28°C has risen almost fourfold since the 1960s, while the number of winter nights when the temperature falls below 12°C is predicted to fall from an average of 21 to zero within 50 years.

For Singapore, the report says, the sea level is forecast to rise by 60cm by the end of the century, eroding coastal protection and decreasing the shoreline of the city state, making it more vulnerable to storm surges and flooding.

The report says climate change could also increase the prevalence of dengue fever. The number of cases has been rising in periodic outbreaks and the last significant peak, in 2007, saw the third highest number of outbreaks ever.

Dhaka, the Bangladeshi capital, heads the list of the most vulnerable cities, mainly because of its position in a big river delta already subject to periodic flooding, its low average height above sea level and its poverty, which makes protection and adaptation more difficult.

Other cities at risk include Jakarta and Manila, which rank equal second, Calcutta and Phnom Penh, which are equal third, Ho Chi Minh and Shanghai, equal fourth, Bangkok, fifth, and Kuala Lumpur, which ties with Hong Kong and Singapore for sixth place.

The report calls on developed countries to agree to shoulder the bulk of the costs required to reduce greenhouse gas emissions, to finance an adaptation fund to pay for changes required in developing countries, and to provide recompense for losses and damage caused by climate-related catastrophes.

However, the report also says that vulnerable cities and national governments should take action themselves, including better management of coastal habitats and ecosystems.

The report is timed to influence the 21 heads of government attending this week’s Asia Pacific Economic Co-operation summit in Singapore, before the global climate change summit in Copenhagen next month.

Source: FT, 11.11 2009 by Kevin Brown in Singapore

The Yangtze river basin is being increasingly affected by extreme weather and its ecosystems are under threat, environmentalists say.

In a new report, WWF-China says the temperature in the basin area of China’s longest river has risen steadily over the past two decades.

This has led to an increase in flooding, heat waves and drought.

Further temperature rises will have a disastrous effect on biodiversity in and along the river, the report says.

The WWF – formerly known as the World Wildlife Fund – predicts that in the next 50 years temperatures will go up by between 1.5C and 2C.

The group’s report is the largest assessment yet of the impact of global warming on the Yangtze River Basin, where about 400 million people live.

Data was collected from 147 monitoring stations. The report’s lead researcher, Xu Ming, said the forthcoming Copenhagen negotiations on climate change would have an obvious and direct influence on the Yangtze.

“Controlling the future emissions of greenhouse gases will benefit the Yangtze river basin, at the very least from the perspective of drought and water resources,” he said.

The report says the predicted weather events and temperature rises will lead to declines in crop production, and rising sea levels will make coastal cities such as Shanghai vulnerable.

Some of the problems could be averted by strengthening river reinforcements, and switching to hardier crops, its authors suggest.

Source: BBC, 10.11.2009


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Carbon Politics and Climat National Securities Risks

Trading Places: IPCC Boss Slams U.S. Plan for Carbon Tariffs, 23.07.2009
The debate over cap-and-trade is turning out to be a debate over trade. The head of the Intergovernmental Panel on Climate Change, Rajendra Pachauri, is the latest to take aim at U.S. “carbon tariffs” that would be slapped on imports from countries that don’t take steps to reduce emissions. He said carbon tariffs undermine the chances of a global deal on climate change by angering developing countries (like China and India).

US officials mull national security risks of climate change, 23.07.2009
Committees in the US Congress that deal with national security and intelligence issues should play a role in crafting bills to cap greenhouse gas emissions from American power plants, oil refineries and other industries, a former Republican lawmaker and ex-military official said Tuesday.

John Warner, who represented Virginia in the US Senate for 30 years and who previously served as secretary of the US Navy, maintains that climate change is a national security issue because it could spawn global conflicts that could require a US military response.


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Markit And The Carbon Disclosure Project To Launch Climate Change Investment Indices

Markit, a financial information services company, and the Carbon Disclosure Project (CDP), the leading independent global climate change reporting platform, today announced their intention to launch a family of investment indices reflecting the financial performance of companies with strong carbon management strategies.

By combining CDP’s benchmark climate change data and Markit’s index expertise, the two companies aim to create a family of high quality equity indices that will help investors gain exposure to companies that actively manage their impact on the environment.

The stock selection and weighting will be based on CDP’s annual corporate Carbon Disclosure Leadership Index (CDLI) data. CDP gathers data from companies globally through an annual information request on behalf of 475 institutional investors. The individual corporate reports are scored by professional services firm PricewaterhouseCoopers LLP based on the quality of information disclosed. This provides a deep insight into companies’ greenhouse gas emissions and climate change management strategies.

Markit and CDP plan to launch an index for the UK and Europe, in addition to a US index and a global index. Markit intends to license the indices to exchange-traded fund (ETF) and structured product providers.

Niall Cameron, Executive Vice President of Commodities, Indices, Equities and Risk Management at Markit, said: “The creation of this family of climate change indices underscores Markit’s commitment to the environmental markets.

“The quality, transparency and independence of the data underpinning these indices are of vital importance to their success and that is why we have chosen to work with CDP, a leading provider of emissions data, on this project.”

Paul Dickinson, CEO of CDP, said: “Climate change is a material issue for increasing numbers of companies and there are significant commercial opportunities for those with a strong carbon management strategy to benefit from the transition to a low carbon economy. This is why we are working with Markit to produce investment indices based on the Carbon Disclosure Leadership Index.”

Source:MondoVisione, 18.06.2009


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CCX Chicago Climate Exchange signs agreement to collaborate on establishing Emissions Trading in Korea

Chicago Climate Exchange, Inc. (CCX®) signed a memorandum of understanding today in Washington, DC with Korea Power Exchange (KPX), Korea Exchange (KRX) and Korea Energy Management Corporation (KEMCO) to collaborate in preparing for the establishment of emissions trading in Korea.

Parties to the agreement will explore avenues of cooperation in the establishment of Korean emissions trading and matters relating to the infrastructure for emission trading, both of which could play an important role in promoting “low carbon green growth” in Korea.

“Emissions trading is a proven tool for using market-based mechanisms to address environmental challenges and we look forward to working with KEMCO, KRX and KPX, as well as the Ministry of Knowledge Economy and other Ministries in Korea, as Korea moves forward with its important ‘low carbon’ growth goals,” said Dr. Richard L. Sandor, Chairman of CCX and Executive Chairman of Climate Exchange plc.

By creatively integrating public concerns about environmental protection and his experience in financial innovation and business development, Dr. Sandor founded CCX in December 2003 and launched the European Climate Exchange (ECX) in April 2005. CCX also operates the Chicago Climate Futures Exchange (CCFE), which handles NOX, SOX and other criteria pollutant contracts based on the U.S. Clean Air Act.

“CCX is the preeminent and most influential organization in carbon trading. This MOU not only represents a historic collaboration of the parties, but represents a crucial initiative between the United States and Korea,” said KPX CEO Il-Hwan Oh.

“CCX has many international connections we want to be part of. CCX has provided a market solution, with many products as everybody knows, and is facilitating the preparation for carbon trading, fostering green growth,” said KRX CEO Jung-Hwan Lee.

“We are confident the MOU will be part of developing infrastructure in Korea for emissions trading,” said KEMCO CEO Tae-Yong Lee.

Source: MondoVisone, 15.06.2009


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Surprising Green Energy Investment Trends Found Worldwide

Science Daily 07.06.2009 – Some $155 billion was invested in 2008 in clean energy companies and projects worldwide, not including large hydro, a new report says. Of this $13.5 billion of new private investment went into companies developing and scaling-up new technologies alongside $117 billion of investment in renewable energy projects from geothermal and wind to solar and biofuels.

The 2008 investment is more than a four-fold increase since 2004 according to Global Trends in Sustainable Energy Investment 2009, prepared for the UN Environment Programme’s (UNEP) Sustainable Energy Finance Initiative by global information provider New Energy Finance.

Extremely difficult financial market conditions prevailed during 2008 as a result of the global economic crisis. Nevertheless investment in clean energy topped 2007’s record investments by 5% in large part as a result of China, Brazil and other emerging economies.

Of the $155 billion, $105 billion was spent directly developing 40 GW of power generating capacity from wind, solar, small-hydro, biomass and geothermal sources. A further $35 billion was spent on developing 25 GW of large hydropower, according to the report.

This $140 billion investment in 65 GW of low carbon electricity generation compares with the estimated $250 billion spent globally in 2008 constructing 157GW of new power generating capacity from all sources. It means that renewables currently account for the majority of investment and over 40% of actual power generation capacity additions last year.

Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said: “Without doubt the economic crisis has taken its toll on investments in clean energy when set against the record-breaking growth of recent years. Investment in the United States fell by two per cent and in Europe growth was very much muted. However, there were also some bright points in 2008 especially in developing economies—China became the world’s second largest wind market in terms of new capacity and the world’s biggest photovoltaic manufacturer and a rise in geothermal energy may be getting underway in countries from Australia to Japan and Kenya”.

“Meanwhile other developing economies such as Brazil, Chile, Peru and the Philippines have brought in, or are poised to introduce policies and laws fostering clean energy as part of a Green Economy. Mexico for example, the Global host of World Environment Day on 5 June, is expected to double its target for energy from renewables to 16 per cent as part of a new national energy policy,” he added.

Overall Highlights from the Report

Wind attracted the highest new investment ($51.8 billion, 1% growth on 2007), although solar made the largest gains ($33.5 billion, 49% growth) while biofuels dropped somewhat ($16.9 billion, 9% decrease).

Total transaction value in the sustainable energy sector during 2008 – including corporate acquisitions, asset re-financings and private equity buy-outs – was $223 billion, an increase of 7% over 2007. But capital raised via the public stock markets fell 51% to $11.4 billion as clean energy share prices lost 61% of their value during 2008.

Investment in the second half of 2008 was down 17% on the first half, and down 23% on the final six months of 2007, a trend that has continued into 2009.

One response to the global economic crisis has been announcements of stimulus packages with specific, multi-billion dollar provisions for energy efficiency up to boosts to renewable energies.

“These ‘green new deals’ lined up by some economies, including China, Japan, the Republic of Korea, European countries and the United States contain some serious clean energy provisions. These will help support the market,” said Mr. Steiner.

“However, the biggest renewables stimulus package of them all can come at the UN climate convention meeting in Copenhagen in just over 180 days time. This is where governments need to Seal the Deal on a new climate agreement-one that can bring certainty to the carbon markets, one that can unleash transformative investments in lean and clean green tech,” he added.

Green Energy Costs Coming Down — Solar Costs Set to Fall 43%

The investment surge of recent years and softened commodity markets have started to ease supply chain bottlenecks, especially in the wind and solar sectors, which will cause prices to fall towards marginal costs and several players to consolidate. The price of solar PV modules, for example, is predicted to fall by over 43% in 2009.

Carbon Markets Continue Upward

Despite the turmoil in the world’s financial markets, transaction value in the global carbon market grew 87% during 2008, reaching a total of $120 billion. Following the lead of the EU and Kyoto compliance markets, several countries are now putting in place a system of interlinked carbon markets and working towards a global scheme under the UN Framework Convention on Climate Change (UNFCCC).

Growth Shifts to the Developing World

On a regional basis, investment in Europe in 2008 was $49.7 billion, a rise of 2%, and in North America was $30.1 billion, a fall of 8%.

These regions experienced a slow-down in the financing of new renewable energy projects due to the lack of project finance and the fact that tax credit-driven markets are mostly ineffective in a downturn. With developed country market growth stalled (down 1.7%), developing countries surged forward 27% over 2007 to $36.6 billion, accounting for nearly one third of global investments.

China led new investment in Asia, with an 18% increase over 2007 to $15.6 billion, mostly in new wind projects, and some biomass plants. Investment in India grew 12% to $4.1 billion in 2008. Brazil accounted for almost all renewable energy investment in Latin America in 2008, with ethanol receiving $10.8 billion, up 76% from 2007. Africa achieved a modest increase by comparison, with investments up 10% to approximately $1.1 billion.

The Greening of Economic Stimulus Packages

Not surprisingly given market conditions, private sector investment was stalling in late 2008 but government investment looks ready to take up some of the slack in 2009. Sustainable energy investments are a core part of key government fiscal stimulus packages announced in recent months, accounting for an estimated $183 billion of commitments to date.

Countries vary significantly in terms of investment and the clarity of their measures. The US and China remain the leaders, each devoting roughly $67 billion, but South Korea’s package is the “greenest” with 20% devoted to clean energy. This green stimuli illustrates the political will of an increasing number of governments for securing future growth through greener economic development.

According to Michael Liebreich, Chairman & CEO of New Energy Finance, “There is a strong case for further measures, such as requiring state-supported banks to raise lending to the sector, providing capital gains tax exemptions on investments in clean technology, creating a framework for Green Bonds and so on, all targeted at getting investment flowing”.

“What’s most important is that stimulus funds start flowing immediately, not in a year or so. Many of the policies to achieve growth over the medium term are already in place, including feed-in tariff regimes, mandatory renewable energy targets and tax incentives. There is too much emphasis amongst some policy-makers on support mechanisms, and not enough on the urgent needs of investors right now.”

Between 2009 and 2011 UNEP estimates that a minimum of $750 billion – or 37% of current economic stimulus packages and 1% of global GDP – is needed to finance a sustainable economic recovery by investing in the greening of five key sectors of the global economy: buildings, energy, transport, agriculture and water.

2009 and beyond: Climate change, energy security and green jobs

New investments in the first quarter of 2009 fell by 53% to $13.3 billion compared to the same period in 2008, reflecting the depth of the global financial crisis, according to the report, which notes “‘green-shoots’ of recovery during the second quarter of 2009, but the sector has a long way to go this year to reach the investment levels of late 2007 and early 2008.”

Climate change, economic recovery and energy security will spur far greater investments in coming years.

In particular, the growing understanding that global carbon emissions (CO2) must peakaround 2015 to avoid dangerous climate change (based on the 4th assessment of the Intergovernmental Panel on Climate Change– UNEP/World Meteorological Organisation) will make clean energy investments national priorities.

Annual investments in renewable energy, energy efficiency and carbon capture and storage need to reach half a trillion dollars by 2020, representing an average investment of 0.44% of GDP.

These levels of investment are not impossible to achieve, especially in view of the recent four year growth from $35 billion to $155 billion. However, reaching them will require a further scale-up of societal commitments to a more sustainable, low-carbon energy paradigm.

With the current stimulus packages now in play and a hoped-for Copenhagen climate deal in December, the opportunity to meet this challenge is greater than ever, even seen from the depths of an economic downturn.

Says Michael Ahearn, President of US-based First Solar: “This report highlights the continuing importance of government leadership to ensure that renewable energies, including solar, achieve their potential in weaning us off fossil fuels and addressing climate change.”

See also: Investment in Clean Energy Exceeded Fossil Fuel Investment in 2008

Global Trends in Sustainable Energy Investment 2009 — Sector Hi-lites


Wind attracted the highest new investment ($51.8 billion, 1% growth on 2007), confirming its status as the most mature and best-established sustainable generation technology. Wind’s leading position continues to be driven by asset finance, as new generation capacity is added worldwide, particularly in China and the US.


Solar continues to be the fastest-growing sector for new investment ($33.5 billion, 49% growth on 2007), with compound annual growth of 70% between 2006 and 2008. Solar’s growth reflects the easing of the silicon bottleneck and falling costs, which are expected to decline 43% in 2009. Solar project financing underwent the most dramatic growth in 2008, rising 71% to $22.1 billion.


Investment in biofuels fell 9% in 2008 down to $16.9 billion. Although the technology is well established, particularly in Brazil, it has suffered for the past two years from over-investment in early 2007, followed by a fall from grace caused by a combination of high wheat prices, lower oil prices and an increasingly heated food-versus-fuel controversy. Biofuels technology investment is now focused on finding second-generation / non-food biofuels (such as algae, crop technologies and jatropha): the second half of 2008 saw next-generation technology investment exceed first-generation for the first time.


Geothermal was the highest growth sector for investment in 2008, with investment up 149% and 1.3 GW of new capacity installed. The competitive cost of electricity from geothermal sources and long output lifetimes have made this an attractive investment despite the high initial capital cost.

Energy Efficiency

New private investment in energy efficiency was $1.8 billion – a fall of 33% on 2007 – although this figure doesn’t capture the investments made by corporates, governments and public financing institutions.

The energy efficiency sector recorded the second highest levels of venture capital and private equity investment (after solar), which will help companies develop the next generation of sustainable energy technologies for areas such as the smart grid. Energy efficiency also attracted more than 33% of the estimated $180 billion in green stimulus measures.

Global Trends in Sustainable Energy Investment 2009 — Regional Hi-lites


Europe continues to dominate sustainable energy new investment with $49.7 billion in 2008, an increase of 2% on 2007 (37% CAGR from 2006-2008).This investment is underpinned by government policies supporting new sustainable energy projects, particularly in countries such as Spain, which saw $17.4 billion of asset finance investment in 2008.

North America

New investment in sustainable energy in North America was $30.1 billion in 2008, a fall of 8% compared to 2007 (15% CAGR from 2006-2008). The US saw a slow-down in asset financing following the glut of investment in corn based ethanol in 2007. Also, the number of tax equity providers fell for wind and solar projects due to the financial crisis.


South Africa — Feed-in Tariffs Kick Start Green Investment

On 31 March 2009, South Africa announced ‘feed-in’ tariffs that guarantee a stable rate-of-return for renewable energy projects. South Africa is hoping to spur the sort of investment spurred in Germany and Denmark through feed-in tariff schemes.

Sub-Saharan Africa — Geothermal Kenya & Sweet Sorghum Ethanol

Elsewhere in Sub-Saharan Africa, lack of finance is the principal barrier to sustainable energy roll-out. However, some notable progress was made in 2008.

In Kenya, a number of investments are underway; including the continents first privately financed geothermal plant and a 300MW wind farm planned for construction near Lake Turkana.

In Ethiopia, French wind turbine manufacturer Vergnet signed a EUR 210 million supply contract in October 2008 with the Ethiopian Electric Power Corporation for the supply and installation of 120 one MW turbines.

In Angola, Brazilian industrial conglomerate Odebrecht set up an Angolan sugar cane processing plant and plans to steer its production from ethanol to sugar when it comes online late next year. UK-based Cams Group announced plans for a 240 million liter per year sweet sorghum ethanol facility in Tanzania.

North Africa — Sun and Wind

Renewable energy in North Africa remains focused on Morroco, Tunisia and Egypt, particularly in solar and wind. Egypt recently announced its expectation that wind farms in the Saidi area will produce 20% of the country’s energy needs by 2020. Morocco’s government has also outlined plans to meet 10% of its power needs with renewable energy sources.


China – Asia’s Green Energy Giant

By 2008, China was the world’s second largest wind market by newly installed capacity and the fourth largest by overall installed capacity. Between 5GW and 6.5GW of new capacity was installed and commissioned in 2008, bringing total capacity to 11GW to 12.5GW.

China became the world’s largest PV manufacturer in 2008, with 95% of its production for the export market.

Some 800MW of biomass power was added in 2008, bringing the total installed capacity for agriculture waste-fired power plants up to 2.88GW. Development of biofuels has all but ground to a halt, mostly due to high feedstock costs.

India – Pressing Need for Grid Improvements and Clean Power Generation

In 2008 the largest portion of new investment in India went to the wind sector, growing 17% — from $2.2 billion to $2.6. Thanks to a supportive policy environment, solar investment grew from $18 million in 2007 to $347 million in 2008, most of which went to setting up module and cell manufacturing facilities.

Small hydro investment in India grew nearly fourfold to $543 million in 2008, while biofuels investment stalled and fell from $251 million in 2007 to only $49 million in 2008.

Japan – A New Push for Sustainable Energy

In December 2008, Japan unveiled a new $9 billion subsidy package for solar roofs, granting JPY 70,000 ($785)/kW for rooftop PV installation. For the first time in three years, domestic shipments of solar cells rose between April to September (up 6%), indicating a fundamental change in domestic solar demand.

Geothermal also seems to be reawakening in Japan, after a twenty-year lull. In January 2009, plans for a 60MW geothermal plant were announced.

Australia – Geothermal and Wind Gaining Support

The Australian government has set up a A$500m ($436 million) Renewable Energy Fund to accelerate the roll-out of sustainable energy in the country. A$50 million has already been committed to helping geothermal developers meet the high up-front costs of exploration and drilling.

Geothermal is expected to provide about 7% of the country’s baseload power by 2030.

Wind will also benefit from Australia’s new push for sustainable energy, and is expected to provide most of the 20% renewable energy by 2020 target.

Other Asian Countries — Philippines, Thailand, Malaysia

In late 2008, the Philippine government signed a new Renewable Energy Law, offering specific incentives (mainly tax breaks) for renewable generation — a first for Southeast Asia and perhaps a model for other countries. Thailand and Malaysia have been talking about introducing renewable energy legislation for some time; and other countries are planning biofuel blending mandates, similar to those introduced by the Philippines in 2007 and subsequently by Thailand.

Latin America

Brazil – World’s Largest Renewable Energy Market

About 46% of Brazil’s energy comes from renewable sources, and 85% of its power generation capacity thanks to its enormous hydropower resources and long-established bioethanol industry.

Some 90% of Brazil’s new cars run on both ethanol and petrol (all of which is blended with around 25% ethanol). By the end of 2008, ethanol accounted for more than 52% of fuel consumption by light vehicles.

Brazil is now moving into wind. The government has announced a wind-specific auction to take place in mid-2009, for the sale of approximately 1GW of wind energy per year.

Brazil also has a global leader in renewable energy financing. In 2008 the Brazilian Development Bank (BNDES) was the largest provider globally of project finance to renewable energy projects.

Chile, Peru, Mexico and the rest of Latin America

Brazil accounted for more than 90% of new investment in Latin American, but several other countries are looking to implement regulatory frameworks supportive of renewable energy.

Chile’s recently approved Renewable Energy Legislation is responsible for regulating the country’s renewable energy sector, where small hydro, wind and geothermal projects have become increasingly attractive for investors. It requires electricity generators of more than 200MW to source 10% of their energy mix from renewables.

In 2008 Peru introduced legislation that requires 5% of electricity produced in the country to be derived from renewable sources over the next five years, including financial incentives such as preferential feed-in-tariffs and 20-year PPAs for project developers.

Mexico has a non-mandatory target to source 8% of its energy consumption from renewable sources by 2012. However a new national energy plan expected at the end of June 2009 is expected to double that target.

For original article click here.

Source: ScienceDaily 07.06.2009


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Asia’s first cleantech funds now raising capital

Preqin shows private-equity managers in Asia are beginning to participate in the worldwide boom of cleantech funds.

Perhaps the biggest trend in private equity right now is investing in cleantech, a term that refers to products or services that improve operational performance, productivity or efficiency, while reducing energy consumption, waste and pollution. And PE managers in Asia are introducing the region’s first dedicated cleantech funds, says Preqin, a London-based consultancy specialising in private equity and infrastructure. Click here for original article.

See also: Investment in Clean Energy Exceeded Fossil Fuel Investment in 2008

According to Preqin, there are now four Asia-based PE funds trying to raise capital for dedicated cleantech funds (see table below). The two largest are from Hong Kong-based First Vanguard, which is raising $500 million for the China and Pacific Rim Water Infrastructure Fund; and Singapore-based Middle East & Asia Capital Partners, which is raising $400 million for its MAP Clean Energy Fund.

There are two more players raising $250 million funds: in Singapore, Ant Global Partners is financing its Ant Global Partners Cleantech Fund; and in Malaysia, Abundance Venture Capital seeks capital for its AVC Abundance Energy Fund.

The first private-equity or venture-capital fund to include a cleantech focus, within a diversified portfolio, emerged in 2005 in India, where IDFC closed a $440 million infrastructure fund. Then in 2006, China’s Prax Capital closed a $153 million fund that included cleantech themes, as did China’s Northern Light Venture Capital, which closed a $350 million fund.

Since then activity has picked up: in 2008, funds in India, China and Hong Kong closed over $5 billion worth of diversified funds that included cleantech plays, while earlier this year, Singapore’s SEAVI Advent closed a $178 million diversified buyout fund.

Preqin says there are now at least 10 PE funds trying to raise capital towards themes that include cleantech, of which four are dedicated, as mentioned above. Together these 10 seek to raise up to $3.6 billion, with the four dedicated funds accounting for $1.4 billion of that.

Preqin has released a report on cleantech funds that shows huge interest among institutional investors and funds of funds. Despite the global financial crisis, overall cleantech fundraising remained steady in 2008, with 29 funds raising a total of $6 billion worldwide, roughly the same as was raised in 2007. The majority has gone to VC funds, with infrastructure funds also playing a big role.

In North America, funds this year seek to raise up to $9 billion, making this the biggest market, followed by European funds, which want to raise over $7 billion, Preqin says.

The consultants also find more than half of cleantech-focused VC firms prefer to take minority stakes, while buyout and infrastructure firms mostly prefer controlling stakes. For institutional investors, these funds represent the preferred means of accessing cleantech themes, as opposed to via the public markets, because the sector is too new to be well represented in the listed space.

Preqin’s 10 largest funds with a cleantech focus raised by Asian fund managers

Fund Fund Type Size (Mn) Vintage Fund Cleantech Focus Fund Manager Fund Manager Location
Baring Asia Private Equity Fund IV Balanced 1,515.0 USD 2008 Diversified Baring Private Equity Asia Hong Kong
IDFC Private Equity Fund III Infrastructure 700.0 USD 2008 Diversified IDFCPrivate Equity India
IDFC Private Equity Fund II Infrastructure 440.0 USD 2005 Diversified IDFCPrivate Equity India
LC Fund IV Venture (General) 400.0 USD 2008 Diversified Legend Capital Management China
Northern Light II Venture (General) 350.0 USD 2007 Diversified Northern Light Venture Capital China
Qiming Venture Partners II Venture (General) 320.0 USD 2008 Diversified Qiming Venture Partners China
Softbank China Venture Capital III Venture (General) 2,000.0 CNY 2008 Diversified SB China Venture Capital China
Nexus India Capital II Early Stage 220.0 USD 2008 Diversified Nexus India Capital India
SEAVI Advent Equity V Buyout 178.0 USD 2009 Diversified SEAVI Advent Singapore
Prax Capital II Expansion 153.0 USD 2006 Diversified Prax Capital China

Preqin’s 10 largest funds with a cleantech focus currently raising by Asian fund managers

Fund Fund Type Target Size (Mn) Fund Status Vintage Fund Cleantech Focus Fund Manager Fund Manager Location
ORYX-STIC Fund II Buyout 500.0 USD Raising 2009 Diversified STIC Investments South Korea
China and Pacific Rim Water Infrastructure Fund Infrastructure 500.0 USD Raising 2009 Pure Cleantech First Vanguard Hong Kong
Sandalwood Capital Partners II Early Stage 350.0 EUR Raising 2009 Diversified Sandalwood Capital Partners India
Ascent India Fund III Expansion 450.0 USD Raising 2009 Diversified UTI Venture Funds India
MAP Clean Energy Fund Infrastructure 400.0 USD Raising 2009 Pure Cleantech Middle East & Asia Capital Partners Singapore
AmKonzen Asia Water Fund Infrastructure 320.0 USD Raising 2009 Diversified AmKonzen Water Investments Management Singapore
Asia Strategic Capital Fund Mezzanine 300.0 USD First Close 2008 Diversified Asia Mezzanine Capital Group Hong Kong
Tripod Capital II Buyout 300.0 USD Raising 2009 Diversified Tripod Capital China
Ant Global Partners Cleantech Fund Venture (General) 250.0 USD Raising 2009 Pure Cleantech Ant Global Partners Singapore
AVC Abundance Energy Fund Natural Resources 250.0 USD Raising 2009 Pure Cleantech Abundance Venture Capital Malaysia

Source:, 08.06.2009 by Jame DiBiasio


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Investment in Clean Energy Exceeded Fossil Fuel Investment in 2008

In a sign of the growing importance of renewable sources of energy, global investment in wind power, solar power, and other alternative forms of energy last year exceeded investments in coal, oil, and carbon-based energy for the first time. The United Nations Environmental Program (UNEP) reported that in 2008, 56 percent of all money invested in the energy sector went to green sources of power, with $140 billion in investments in renewable energy compared to $110 billion in fossil fuel technologies.

Wind power attracted the most investment, with $51.8 billion worldwide, while investments in solar power rose 49 percent to $33.5 billion, UNEP reported. Investment in geothermal energy rose most rapidly, increasing 149 percent over 2007, to $2.2 billion. China drove much of the growth in investment in renewable sources, particularly in wind power. Despite booming investment in green energy, the renewable sector still only accounts for 6.2 percent of total power generating capacity.

Source:Yale Environment 360, 03.06.2009,     New York Times, 05.06.2009


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Worldbank: State and Trends of the Carbon Market 2009

Over the past year, the global economy has cooled significantly, a far cry from the boom just a year ago in various countries and across markets. At the same time, the scientific community communicated the heightened urgency of taking action on climate change. Policymakers at national, regional and international levels have put forward proposals to respond to the climate challenge.

The most concrete of these is the adopted EU Climate & Energy package (20% below 1990 levels by 2020), which guarantees a level of carbon market continuity beyond 2012. The EU package, along with proposals from the U.S. and Australia, tries to address the key issues of ambition, flexibility, scope and competitiveness. Taken together, the proposals tabled by the major industrialized countries do not match the aggregate level of Annex I ambition called for by the Intergovernmental Panel on Climate Change, or IPCC (25-40% reductions below 1990). Setting targets in line with the science will send the right market signal to stimulate greater cooperation with developing countries to scale up mitigation.

Download: Trends of the Carbon Market May 2009 Worldbank

Overall Market Grows
The overall carbon market continued to grow in 2008, reaching a total value transacted of about US$126 billion (€86 billion) at the end of the year, double its 2007 value (Table 1). ApproximatelyUS$92 billion (€63 billion) of this overall value is accounted for by transactions of allowances and derivatives under the EU Emissions Trading Scheme (EU ETS) for compliance, risk management, arbitrage, raising cash and profit-taking purposes. The second largest segment of the carbon market was the secondary market for Certified Emission Reductions (sCERs), which is a financial market
with spot, futures and options transactions in excess of US$26 billion, or €18 billion, representing a five-fold increase in both value and volume over 2007. These trades do not directly give rise to emission reductions unlike transactions in the primary market.

See also: Investment in Clean Energy Exceeded Fossil Fuel Investment in 2008

Source: Worldbank, 26.05.2009


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What is carbon capture and storage?

Executives and public policy makers should familiarize themselves with the technologies involved in carbon capture and storage (CCS) as they work toward reducing carbon dioxide levels in the atmosphere.

Climate change has businesses, governments, and nonprofits examining how to stabilize atmospheric greenhouse gases while still maintaining economic growth. In plotting the course to a low-carbon economy, they will weigh a number of methods for addressing the various risks and opportunities. Carbon capture and storage (CCS)—or more accurately, the sequestration of carbon dioxide—is an important topic in the emerging field of climate change. It represents one possible approach for stabilizing atmospheric greenhouse gases—although there are many economic, technical, and legal barriers to its implementation. As background for informed discussion, we offer this interactive depiction of the technologies involved in CCS.

For full article and interactive description of McKinsey click here

Source: McKinsey January 2009


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Financing Energy Efficency: Lessons from China, Brazil, India and Beyond

The World Bank has recently published a book that might be interesting to fellow CleanTechies. Financing Energy Efficiency: Lessons from Brazil, China, India and beyond says that aforementioned countries will more than double their energy use and greenhouse gas emissions within a single generation if they fail to implement successful energy efficiency efforts. Given the increasing energy demand from these three developing nations at a time of skyrocketing worldwide energy prices and greenhouse gas emissions, there should be a general interest to reduce energy consumption in these countries.

Alarming figures
China, India and Brazil are three of the world’s top 10 energy consumers. Together these countries are expected to represent 40% of the world’s population and be responsible for well over 50% of all energy demand by developing countries. By 2030, they are expected to account for 42% of growth in energy demand worldwide.

Bob Taylor, a World Bank energy economist, explains his and the other authors’ approach in writing this book: “We dissected the energy efficiency terrain through this study to find out why it’s so hard to get the right incentives in place so that more investment can happen. What we found is enormous untapped potential – especially in Brazil, China and India – but plenty of good solutions that can work as long as the financing and investment environment is in place and there’s plenty of commitment from policy makers.”

Need for action
According to the authors, energy efficiency is critical in these countries “for reasons of energy supply security, economic competitiveness, improvement in livelihoods, and environmental sustainability.” While they see gradual improvement in the three countries, “when you think about the sort of energy demand of even one of these countries in the next decade, the need for action and much faster progress is very clear,” says Taylor.

The authors conclude that implementing energy efficiency projects could – to a certain extent – be cheaper than providing new supplies. However, the development and financing of energy efficiency projects would be impeded by weak economic institutions in these developing and transitional economies. The authors analyze these difficulties, suggest a 3-part model for planning and financing energy efficiency retrofits and present thirteen case studies to illustrate the issues and principles involved.

Source: CleanTechies, 02.12.2008


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Tianjin Climate Exchange (TCX) And Hong Kong Exchanges And Clearing Limited (HKEx) Begin Discussions On Possible Collaboration

Chicago Climate Exchange (CCX), which is owned by Climate Exchange plc (LSE: CLE.L), announced today that the Tianjin Climate Exchange (TCX), a CCX joint venture partner, and Hong Kong Exchanges and Clearing Limited (HKEx) have entered into discussions on possible avenues for cooperation in environmental emissions markets. Details of the collaboration will be explored in the coming months.

Source: HKEx, 23.12.2008


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HKEx Signs Corporate Social Responsibility and Carbon Reduction Charters

Hong Kong Exchanges and Clearing Limited (HKEx) has signed two Hong Kong-based charters by which HKEx is committed to be a responsible corporate citizen.

By signing Community Business’s Hong Kong Corporate Social Responsibility (CSR) Charter, HKEx is committed to providing leadership on CSR, integrating CSR into its organisational strategy and operations, and engaging and communicating with its stakeholders on its CSR strategies and policies in a manner relevant and appropriate to its business. By signing the Hong Kong Environmental Protection Department’s Carbon Reduction Charter, HKEx pledged to support the reduction of greenhouse gas emissions.

Signing the charters demonstrates HKEx’s commitment to the sustainable development of the workplace, marketplace, community and environment, and to promoting the development of socially responsible practices in its marketplace and community.

Source: HKEx, 19.12.2008
The Hong Kong Corporate Social Responsibility Charter is available at:

The Carbon Reduction Charter is available at:


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