Market Trends: Renewables Growth Shifting from Europe to Emerging Markets

Triodos Investment Management BV, an arm of Dutch lender Triodos Bank NV, plans a clean-energy fund focused on emerging markets as growth in the industry shifts away from Europe.

The fund will invest in the “more developed” emerging nations and center on wind, solar and hydropower, said Matthew Clayton, executive director for Bristol, England-based Triodos Renewables Plc, a fund under Triodos Investment Management.

Renewables fund managers, facing slower growth in Europe, are looking to new markets to tap expanding economies and accelerating power demand. While Asia’s biggest emerging nations for clean energy are China and India, others such as South Korea and Thailand are starting to attract more investment.

“We’ve seen that several experienced renewable energy developers that Triodos has worked with in Europe are moving into new countries,” Gerrit-Jan Brunink, a fund manager at the company, said by e-mail. “Also, many existing clients in the Triodos emerging-market network have started to become active or are interested in renewable energy.”

More countries are establishing regulatory frameworks to support clean energy. While China has long provided subsidies for renewable-power projects and plans a cap-and-trade emissions program in seven provinces this year, nations such as South Korea are also now stepping up measures to curb carbon output.

Fund Size

Triodos is “exploring ideas” for the fund’s structure, according to Brunink, who said new funds typically target 50 million euros ($64 million) at first, with expected growth to 100 million euros.

China was the biggest renewables market in emerging Asia last year with $67 billion of investments, according to Angus McCrone, a senior analyst at BNEF. India accounted for $7 billion, Thailand $1.3 billion and South Korea $900 million, he said.

Separately, Triodos Renewables will start raising money from the retail industry in October, Clayton said in an interview in London. The fundraising, targeted at 10 million pounds ($15 million) to 15 million pounds by year-end, will be used to expand in wind and solar power, he said.

Triodos Renewables, with the bank’s Renewables Europe Fund, bought 49.8 percent of a 10-megawatt wind farm in the U.K. last month.

Copyright 2013 Bloomberg

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