Venture Investors See Opportunity in Australia’s Nascent Cleantech Sector

Australia will see a resurgence of wind and solar project activity in 2013 as power companies push to further fulfill their obligations under the country’s 2020 renewable energy target, construction and equipment costs continue to fall and solar reaches a level where it is competitive with off-grid and onsite usage without a feed-in tariff (FIT), according to a new report.

In its 2013 Australian Cleantech Review, research and advisory firm Australian CleanTech was upbeat on foreign direct investment in the nascent cleantech sector, which includes products and services that have both economic and environmental benefits such as renewable energy, water, waste and recycling, energy efficiency and carbon trading.

Investors from China and Korea have started to explore investment opportunities available in Australia, the review said.

“This is a very significant opportunity for the Australian cleantech sector. 2013 will see this investment flow accelerate and start to be seen as the usual way to secure finance,” it said.

Cleantech recorded combined revenues of nearly A$29 billion ($30 billion) in calendar year 2012.

Australia’s 1,340 cleantech companies were involved in capital transactions totaling A$1.3 billion during 2012 in 126 separate deals.

With 53,000 employees, the sector is larger than the direct employment of the automotive manufacturing industry in Australia and the A$29 billion of revenue makes it equal in value to a quarter of the entire manufacturing sector.

Yet Australian CleanTech’s principal John O’Brien noted: “Australia is falling further behind the rest of the world.

“The government’s industry development programs in the 2012 have provided some assistance to the sector, but we still have a long way to go before we are in the premier league,” he added.

Stock-exchange listed cleantech companies in Australia had a combined market capitalisation of $9.2 billion at 31 December 2012, up from $7.4 billion 12 months earlier, and raised a total of $257 million in new capital in the 12 months to 31 December 2012, the review said.

It examined the likely regulatory, technical and investment trends for the sector, concluding that the global market opportunities and potential for investment returns will keep the global focus on cleantech.

“Whilst Australia will continue to lag, the spillover from international corporate and financial investors seeking global solutions will see continued investment into the Australian market.”

Click here to read the executive summary and purchase the full report


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