Baseload, Bioenergy, Energy Efficiency, Geothermal, Hydropower, Onshore, Project Development, Solar, Storage, Wind Power

New World Bank Report: Chinese Clean-tech SMEs Embrace Opportunities

The World Bank indicated in its new report “Building Competitive Green Industries: The Climate and Clean Technology Opportunity for Developing Countries” that small and medium-sized enterprises (SMEs) in developing countries are set to undergo significant growth and create more jobs in the field of clean technology. Anabel Gonzalez, senior director for the World Bank’s Global Practice on Trade and Competitiveness, said developing home-grown clean-tech industries will help developing countries more effectively increase the adoption of low-cost clean energy and drive sustainable economic development.

Over the past decade, clean technology has become a major global market in its own right. Developing countries are emerging as an important driver of innovation in and the development of global climate and clean-tech markets. In addition, investments in clean technology are moving from developed markets into developing countries.

The World Bank anticipated in the report that over the next decade, clean-tech investments in developing countries are expected to reach US$6.4 trillion, with US$1.6 trillion of the investment accessible to SMEs. Clean-tech markets in China, Latin America and Sub-Saharan Africa, the three largest clean-tech markets in terms investments by SMEs in clean technology, are likely to reach US$415 billion, US$349 billion and US$235 billion, respectively in the three markets, with the investment being spread across projects involving wastewater treatment, onshore wind, solar, electrical vehicles, geothermal, biomass, and small-scale hydro.

Chinese SMEs are embracing opportunities in onshore wind power, solar photovoltaic (PV) power and electrical bicycles with the three markets valued at US$80 billion, US$70 billion and US$63 billion, respectively. The Chinese government is encouraging the development of its solar PV industry, the global market share of which rose from less than 2 percent in 2002 to 45 percent in 2010. China has built large PV manufacturing facilities domestically and is boosting the development of solar PV by supporting research and development of the manufacturing process as well as providing subsidies and low-cost loans.

A Bloomberg report showed that solar PV manufacturing costs in China have been reduced by 80 per cent since 2008 and the country is well on track to meet its target of installing 50 million kW in solar capacity by 2020. With China’s per capita income continuing to rise, China, known as the Bicycle Kingdom, is eyeing an electrical bicycle market with huge growth potential and is expected to become a leader in the global electrical bicycle sector as electrical bicycle sales in the country are expected to top 450,000 units in the years from 2012 to 2020. In addition, the Chinese government has formulated an ambitious growth strategy for its electrical vehicle market.

SMEs engaged in the clean-tech market in developing countries face challenges in securing financing in their early and growth stages, attracting venture capital and public funding as well as improving their technical abilities. However, the SMEs surveyed expressed their confidence in the clean-tech market environment and business prospects. Ninety percent of the respondents said they had expanded their businesses and announced plans to hire new employees despite the slowdown in global economic growth.

Lead image: China flag. Credit: Shutterstock.