Asia News & Deals Update: China Extends Its Role as Global Cleantech Investment Leader, CITIC Leads Series D for Organica Water

Our monthly deep dive on Asia’s clean technology investment news, policies, deals and intelligence that uncover emerging opportunities in the region: 

China has positioned itself as a global leader in clean energy and other sustainable technologies, and it’s taking steps to further cement that position.

“China continued to be a global leader of investment in clean energy projects in 2017,” says a new report from the Institute for Energy Economics and Financial Analysis (pdf), which adds that the country has “further positioned itself to dominate in new energy technologies such as batteries and electric vehicles.”

The country was by far the global leader in clean energy investments last year. Data from Bloomberg New Energy Finance show that Chinese investment in clean energy totaled $132.6 billion in 2017, comprising 40% of total clean energy investment worldwide. The U.S. was a distant second, with $56,9 billion in clean energy investments.

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For China, last year’s total was up 24% from $107.2 billion in 2016, and surpassed the previous yearly high, the $125.4 billion China spent on clean energy in 2015, according to BNEF data. One area that saw a lot of Chinese investor interest in 2017 was distribution-grid connected systems, the BNEF report says.

China’s dominance looks set to continue, with Fatih Birol, executive director of the International Energy Agency, saying China will remain the largest investor in clean energy.

China is now in “a leading position in key technologies such as solar, battery storage or direct current transmission,” Birol says in an interview with Xinhua, the Chinese government’s press agency.

About a third of Chinese people say they will consider buying an electric car, a UBS survey found. Drivers in other countries are going down the same road, according to the Journal, with car buyers in Japan and Europe also increasingly likely to buy an EV. The U.S. “is now the only outlier” on this point, the Journal says.

Other notes from the IEEFA report:

- China is “outmaneuvering other economies in securing supplies of new energy commodities’ such as nickel, lithium and cobalt. This will “allow China to dominate battery and EV manufacturing going forward.”
- The country is “by far the largest market for smart meters globally,” and its investments in energy efficiency grew 24% in 2016, the biggest growth among any country.
- China is now the world’s top exporter of “environmental goods and services,” having surpassed both the U.S. and Germany.

With the U.S. pulling out of the Paris climate agreement and China reaffirming its own commitment to reduce carbon emissions, China has been able to “further project itself globally as a responsible major power while addressing its domestic air pollution concerns and building world-leading capacity in new energy markets,” the IEEFA report says.

China’s dominance extends to the electric vehicle industry, with production and sales of EVs growing 50% in the first 11 months of last year, despite subsidies for EV manufacturers being cut, the Wall Street Journal notes.

Here’s a look at some other important news and developments from across Asia:

Deals and Investments

Enerkem, Siobioway Team Up for Chinese Biofuel Plants: Canadian biofuels producer Enerkem and China’s Sinobioway Group have formed a joint venture that will build about 100 biofuel plants across China in coming years, turning the country’s trash into biofuel and renewable chemicals while reducing China’s carbon emissions and landfill needs. Sinobioway will invest about $100 million in Enerkem as part of the deal, which is Enerkem’s first foray into the Chinese market. Montreal-based Enerkem produces ethanol and methanol, as well as renewable chemicals, from municipal solid waste.

CITIC Capital Leads Series D Venture Funding for Organica Water: CITIC Capital’s Silk Road Fund led a $21 million Series D funding round this month for Organica Water, which provides technologies for localized treatment and recycling of  wastewater. It was the largest private equity round Organica Water has raised to date. The Silk Road Fund is a pan-Eurasian fund that focuses on energy and resource efficiency, agriculture and food technology, water safety, and transportation. CITIC Capital is part of the CITIC Group, a Chinese-government owned investment company. Other investors in this funding round included Paris-based Idinvest Partners, which also invested in Organica Water’s Series C round.

$100 Million for Waste-to Energy Plants: The Asian Development Bank is backing a $100 million loan facility agreement with Hong Kong based environmental services firm China Everbright International to fund waste-to-energy plants across Vietnam’s Mekong Delta. China Everbright will develop the plants, which will help Vietnam reduce and reuse its household waste and while also producing electricity. Vietnam generates nearly 28 million tons of waste each year, with much of it going to landfills. China Everbright currently runs 43 waste-to-energy projects across China.

China Invests in Canadian Cleantech: Chinese technology companies and venture capital firms are putting more money into Canadian companies that specialize in areas like cleantech and artificial intelligence, the South China Morning Post reports. For example, Beijing-based private equity fund Tsing Capital is an investor in GaN Systems, an Ottawa-headquartered firm that develops gallium nitride transistors for electric vehicles and for solar and wind power systems.

Biogas Plant in Japan: A new facility in Japan will convert farm and food waste into renewable energy. The plant in Yabu, a town northwest of Osaka, will be built by Canada’s Anaergia, and will use the company’s waste processing and wastewater treatment equipment. Japan’s Toyo Energy Solution Co. is an investor in the plant and will operate it. The facility will create biogas via anaerobic digestion of organic feedstock recovered from waste streams, with the gas used to create about 1.4 MW of electricity. Meanwhile, an adjacent greenhouse will use waste heat recovered from the plant.

Canadian Battery Tech to Power Chinese EVs: Battery technology developed by Canadian utility Hydro-Quebec will power Chinese electric vehicles thanks to a new licensing deal with  China’s Dongshi Kingpower Science and Technology. Dongshi will use solid state lithium-ion battery technology developed by Hydro-Quebec, the government-owned utility that runs dozens of hydroelectric plants, to produce batteries for the Chinese automotive market. Solid state batteries have twice the energy density of standard lithium-ion batteries and are safer, the companies say. Terms of the deal were not disclosed.

Seed Funding for  Industrial Wastewater Firm: EcoWorth Tech, a Singapore-based startup, raised S$1 million (about USD$750,000) in seed funding from Budding Innovations, a “technology commercialization and venture building firm,” and the FundedHere crowdfunding platform. EcoWorth Tech focus on  a wastewater treatment technology called “carbon fibre aerogel,” and says it will use the seed money to expand its business and test its products with corporate clients.

Advances in Technology

Air Purifying Tower in China: The Chinese city of Xian is home to what’s being called the world’s biggest air purifier – a 100 meter (328 feet) tall tower that sucks in polluted air at its base, runs it through a filter and exhales cleaner air at the top. The scientist leading the project says the tower has led to improved air quality in a 10-squre-kilmoter (1.8 square mile) area. Skeptics, though, note that a city is not a “closed box,” and question whether such a purifier, despite its size, can really make that much of a difference.

Flash-Charging Electric Bus in Singapore: French battery maker Blue Solutions has deployed a fast-charging electric bus at Nanyang Technological University-Singapore. The 22-seat, all-electric shuttle requires just 20 seconds to recharge its batteries, meaning it can recharge at shuttle stops, while passengers alight or disembark. It will run between NTU-Singapore’s residence halls and Cleantech One, an office building in Singapore’s first “green business park.”

Green Bonds

$150 Million Issued in Philippines: BDO Unibank, the largest bank in the Philippines, issued $150 million worth of green bonds, the first green bond issuance by a commercial bank in the Philippines. The money will fund renewable energy, green buildings and energy-efficient equipment across the country, as the Philippines works toward cutting carbon emissions by 70% by 2030. The sole investor in the bonds was the International Finance Corp., a sister organization of the World Bank. This is the first time the IFC has bought green bonds from a financial institution in the East Asia/Pacific region.

Green Bonds for Indian Clean Energy: Clean energy developer Sindicatum Renewable Energy has issued green bonds worth 2.5 billion Indian rupees (about $40 million), payable in U.S. dollars. Sindicatum, based in Singapore, says it will use the proceeds to fund renewable energy projects in India and to refinance outstanding debt. The bonds, issued in two tranches with maturities of five and seven years, “will allow us to accelerate the pace of our investments in India’s clean energy infrastructure while protecting us from foreign exchange risk,” CEO Assaad Razzouk says.

Policy Matters

Tesla Warns Hong Kong over EVs: Tesla says it will have to reduce its operations in Hong Kong if the government there doesn’t reinstate tax incentives for electric car buyers. The removal of the tax benefits last year led to prices soaring by 80% for some high-end electric cars, and sales plummeted, especially for Tesla. The company had averaged 230 car sales per month from April 2016 through early 2017, and sold nearly 3000 cars last March alone, just before the tax incentives expired. From April through December, Tesla sold a total of just 32 cars in Hong Kong.

Korean Government Sets Targets for Renewable Energy: South Korea intends to boost its use of renewable energy sources and natural gas, while cutting its reliance on nuclear and coal, the government says in its latest “Basic Plan for Long-term Electricity Supply and Demand.” The country is aiming at using renewables for 34% of its total installed capacity by 2030, up from just under 10% today. The installed capacity of renewables will jump from 11.3 GW today to 55.8 GW by 2030, according to the plan, with more of the increase coming from solar and wind power.

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