News November 2009

The following are summaries of news stories from the November 2009 print edition of Environmental Finance magazine

Investors discounting Copenhagen climate talks

Investors are downplaying the importance of the forthcoming Copenhagen talks in terms of providing a boost for – or harming the performance of – low-carbon stocks. They say that, with a major breakthrough discounted, their attention is increasingly focused on national-level policies – although some suggest that the Copenhagen talks have already had an effect in advancing low-carbon businesses.

“To some extent, Copenhagen has already happened,” said Nick Robins, head of the climate change centre at banking giant HSBC in London. “It’s had a kind of magnetic attraction on domestic policy – governments have already done more than they would otherwise, although perhaps not much more.” More... 

US carbon market will be ‘inefficient’ – banker

A leading carbon banker has warned of the risk of inefficiencies in the looming US cap-and-trade market.

Proposed reforms to derivatives trading in the US, including restricting derivatives to exchanges, would make an emissions trading market inefficient and will raise transaction costs, said Abyd Karmali, a managing director at Bank of America Merrill Lynch in London, at the Carbon Finance 2009 conference on 20 October. More...  

Centrica’s $1.2bn offshore bet shows bank caution

UK utility Centrica has announced plans to invest £725 million ($1.2 billion) in an offshore wind farm, and has refinanced part of its existing renewables portfolio with a consortium of 14 banks. However, investors and analysts say the deal shows banks are still not at ease with project finance for offshore wind farms.

Construction of the 270MW Lincs offshore wind farm is expected to start in 2010. It will benefit from the UK government’s decision to grant offshore wind projects two Renewable Obligation Certificates for each megawatt hour generated, in its re-banding of its support mechanism for renewables. More...

VAT clampdown leads to carbon market’s first quarterly drop

Both the value and the volume of carbon trading fell between the second and third quarters this year, under the twin effects of recession and a clamp-down on value-added tax fraud.

Figures from London-based analyst New Energy Finance show the value of the market falling from $38 billion in the second quarter to $30 billion in the three months to the end of September, and overall volumes falling from 2.143 billion tonnes of carbon dioxide equivalent to 1.760 billion. More... 

Aviva calls for CDP to launch ‘Carbon Mitigation Project’

The chairman of financial services group Aviva has called for the Carbon Disclosure Project (CDP) to move from disclosure to mitigation – a proposal which was enthusiastically met by the CDP’s chairman and CEO.

“We need to go further,” said Colin Sharman, chairman of the world’s fifth largest insurance group, speaking at the London launch of two reports from the CDP. “The CDP should develop something like a ‘Carbon Mitigation Project’.” More...  

World Bank arranges $290m Mexico cat bond

Mexico has sold a $290 million catastrophe bond to investors, becoming the first country to use the ‘Multicat’ framework developed by the World Bank.

The three-year bond will pay the government in the event of an earthquake or hurricane hitting Mexico, helping it fund emergency relief. Investors get paid a return of up to 11.5% above US Treasury money market funds, but risk losing their principal if the defined disaster occurs. More... 

US stimulus money boosts wind power

The US renewable energy grant programme has led to a surge in wind project development in recent months, according to the American Wind Energy Association (AWEA). But it warned that development in the fourth quarter of 2009 is unlikely to be as strong, because wind turbine manufacturing still lags 2008 levels.

The US wind energy industry installed 1,649MW of new generating capacity in the third quarter, up from 1,210MW in the second and 1,389MW in third-quarter 2008. More than 5,800MW of capacity has been added so far in 2009, bringing total US capacity above 31,100MW, according to the Washington, DC-based AWEA. More... 

UK Treasury wins first round of RBS environment case

A High Court judge has quashed an attempt by three NGOs to force the UK government to apply stricter environmental and social criteria to investments made by RBS, one of the banks nationalised during the credit crunch.

However, the NGOs have vowed to appeal the ruling. Legal action launched in July by the World Development Movement, Platform and People & Planet has suffered an early setback, after an oral hearing failed to secure the court’s permission for a judicial review. More... 

German coalition steers away from solar tariff cuts

The recently elected German coalition government has dropped plans for major cuts to solar photovoltaic (PV) feed-in tariffs.

The coalition policy roadmap for the coming legislative period agreed last month now simply calls for discussions with the solar industry and consumer organisations over measures that might be taken to avoid over-support of PV. More... 

SEC guidance to ease climate change resolutions

Investors will now find it easier to demand climate change disclosures from US-listed companies, following a Securities and Exchange Commission (SEC) decision on 27 October.

In a bulletin, the SEC said it was revising its guidance on ‘no action’ requests, whereby companies ask the SEC for permission to ignore shareholder resolutions. More... 

Flurry of deal-making hits solar sector

Chinese solar thin-film manufacturer Trony Solar Holdings could raise up to $200 million through a listing on the New York Stock Exchange, the latest in a cluster of solar deals to emerge in recent weeks.

The Hong Kong-based firm, established in 1993, has capacity to produce 115MW a year of photovoltaic solar cells. It has not yet released a price range for its listing of American depositary shares. More... 

Triodos raising €90m to boost sustainable lending

Triodos Bank is seeking €90 million ($133 million) in fresh capital to expand its loan portfolio, as it reports “unprecedented interest” in its approach to banking after the financial crisis.

The Netherlands-based ethical bank said it expects to “double its balance sheet, customer numbers and lending to sustainable companies” over the next three to four years. And last month it launched a website revealing exactly which companies and individuals it lends to. More... 

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