Canadian Investment Fund to Focus on Alternative Energy

An investment company has launched Canada’s first labour-sponsored investment fund to capitalize on the “rapidly growing global demand” for renewable energy and energy efficiency.

TORONTO, Ontario, CA, 2002-01-31 [] Triax Capital says the ‘E2 Venture Fund Inc’ will initially link all its assets to the performance of the S&P 500 Index, providing investors with immediate performance potential and diversification, in addition to tax savings under Canada’s registered retirement savings plan, a 35 percent tax credit, and the long term return potential associated with venture investment funds. “Global energy markets are experiencing wholesale changes as a result of technological advancements, competitive pressures, regulatory changes and environmental concerns,” says Triax. “Globally, $10 to $15 trillion is expected to be invested in renewable energy projects in the next ten years.” E2 will focus on investing in emerging Canadian firms that develop alternative energy and efficiency technologies to meet the demand from utilities, municipalities and large industrial companies. The prospectus notes that advances in solar and wind energy, fuel cells, alternative fuels and power electronics will “revolutionize” the energy marketplace. “With demand outpacing supply, the global energy market is experiencing enormous change driven by technological advancements, increased competition, regulatory changes and environmental imperatives,” it explains. “The need for alternative energy and power sources is increasing at a rapid pace, offering excellent opportunities for Canadian companies with innovative technologies and solutions for energy and process efficiency.” The Worldwatch Institute says global demand for energy will climb 60 percent by 2020, while the U.S. Department of Energy predicts renewable energy use will grow by 34 percent in North America alone. “Deregulation of the $350 billion North American electric utility industry is driving competition and leading to an overall shift in the way energy is provided and consumed,” says Triax’s Bill Tharp. “Exciting developments in solar, hydrogen, fuel cell and nanotechnologies have the potential to bring us cost competitive power from a number of different sources. The significant investment potential from these types of opportunities is now beginning to be commercially exploited.” The initial offering price for E2 is $10 per share with a minimum subscription of $500. Investors are eligible for tax credits of up to $1,750 on a maximum $5,000 investment. These credits, combined with the full RRSP eligibility of the Fund, means a $5,000 investment can cost an Ontario resident as little as $930. “The Fund believes that a new economy is emerging based on proven markets for essential products and services, such as alternative energy, transportation, water, and materials that embody the principles of process and resource efficiency,” says the prospectus. “The Fund believes that the market for these products and services is poised for substantial growth over the next decade.” “Governments around the world are implementing policies which have the effect of promoting technologies that are more efficient and less harmful to the environment,” it notes. “These reductions advance the development of new less harmful technologies and the retrofitting of existing facilities.” “Many of these developments can be expected to feature products that are more efficient, less wasteful, and more targeted to customers’ specific needs. Examples include wind power, where generation costs have decreased over the past 20 years to the point where wind turbine systems are becoming price competitive with fossil fuel fired power in some regions,” it continues. “While conventional power plants waste as much as two-thirds of the energy they consume, the use of micropower can lead to total efficiencies of 80-90 percent.” Deregulation, distributed generation, resource scarcity and security of supply will be other factors that boost investments in renewable energy, and the Fund will place primary investment in fuel cells, battery power, wind power, photovoltaic cells, solar thermal power, cogeneration, geothermal power, micro hydroelectric power, and fuel technologies (including natural gas, ethanol, hydrogen, methane and biofuels). The typical investment will be up to $3 million in the start-up round. Triax administers the E2 Venture Fund, and four other LSIF funds, with assets of $1.5 billion.
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