PARIS - The investment capital flowing into renewable energy technologies reached $100 billion in 2006, according to an analysis by the United Nations Environment Programme (UNEP). Of that, a record $71 billion was invested in companies and new sector opportunities, up 43 percent from 2005, while roughly $30 billion was due to mergers, acquisitions, leveraged buyouts, and asset refinancing.

Wind power, solar energy, and biofuels are drawing most of the investments, including roughly $28 billion invested in new generating capacity. In addition, venture capital and private equity investors poured $2.3 billion into biofuels, $1.4 billion into solar energy, and $1.3 billion into wind power, mainly to increase manufacturing capacity. According to the report, renewable energy investment is nearly evenly split between the United States and Europe.

While some may be tempted to compare the renewable energy investment boom to the earlier dotcom boom, the UNEP report states that the renewable energy boom is underpinned by real demand, growing regulatory support, the considerable backing of tangible assets, and increasing revenues. Most if not all of these factors were lacking during the dotcom boom, which ultimately went bust.

Publication date: 07/02/2007