Cleantech Bulgaria Periodic Newsletter_2012

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LOCAL and GLOBAL Highlights
for the
BULGARIAN COMMUNITY
OF CLEAN TECHNOLOGIES and SUSTAINABLE DEVELOPMENT

Welcome to the first issue of the Bulgarian Cleantech community newsletter!

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Cleantech Bulgaria Periodic Newsletter_2012

  1. 1. NEWSLETTER CLEANTECH BULGARIA 2012 2012 PERIODIC ISSUE FOR THE CLEANTECHCOMMUNITY
  2. 2. LOCAL and GLOBAL Highlights For The BULGARIAN COMMUNITY OF CLEAN TECHNOLOGIES and SUSTAINABLE DEVELOPMENT Welcome to the first issue of the Bulgarian Cleantech community newsletter! WHY we decided to start this NEWSLETTER?We, at Cleantech Bulgaria dedicate our efforts to develop the network that will bring together the business, society and policy makers for the sustainable future of Bulgaria. We believe : there can be few more pressing and critical goals for the future of humankind than to thatensure steady improvement in the quality of life for this and future generations, in a way that respects our common heritage –the planet we live on. But moving towards greater sustainability will not happen without broad public demand fortransformation – it will challenge individuals, institutions and societies to view tomorrow as a day that belongs to all of us, or it will not belong to anyone. In other words, the change starts with the people. Over the last three months, we have made further progress towards our objective of fostering the development of the eco-conscious community in Bulgaria. Among our various on-line and off-line supportive initiatives, our NEWSLETTER is designed to help you get oriented in the local attitudes and news, as well as in the global trends on the sustainable business market. Each newsletter will arm you with the latest news, reports and personal insights on a wide range of sustainable business topics so you can quickly and easily keep on top of the rapidly shifting landscape of sustainable business. The Newsletter will be issued on a quarterly basis (every 3 months) on an annual subscription fee. Membership in the Cleantech Bulgaria Network is free of charge. Join us here.Join us in instigating a cultural shift towards sustainable future! 2 :
  3. 3. IN THIS ISSUE: : CONTENT: CONTENT OVERVIEW: What happened in the Bulgarian What happened in the Bulgarian Cleantech Cleantech Community in 2012 :: p.3-6 community in 2012? Being the first attempt for periodic specialized The importance of sustainability – information and insights of the Bulgarian green diverse perspectives :: p. 7-12 business scene, in this section of the newsletter we aim to land some initial overview of the Think Global: Sustainability activity report :: p. 13-20 activities and adjustments of this heterogenic community. Forthcoming Cleantech Bulgaria Here you can find information for the major initiatives in 2013 :: p.20-22 events and initiatives of the Bulgarian clean tech community that took place in 2012. Disclaimer :: p. 22 The importance of sustainability – diverse Editorial team: Cleantech Bulgaria: perspectives is trying to present the insights Who are we? :: p. 23-26 for sustainable development if a diverse group of professionals – the point of view of a young green-thinking entrepreneur, anenvironmental- active NGO, a big eco-conscious company and last but not least – an innovative SME.Think Global: Sustainability activity report is our financial overview for sept-nov 2012 for the globalcleantech scene trying to map the most important global activities on the clean technologies market andtranslate it in a local context. Our report provides up-to-date information on the following topics:  Clean Energy M&A Transactions  Clean Energy Public Market Transactions  Clean Energy Project/Asset Finance  Clean Energy VC/PE Investments  Quarterly Feature AnalysisUpcoming events for the Bulgaran cleantech community in 2013 is our section intended to keep youinformed for the forthcoming events and initiatives at the Bulgarian green scene.This issue features interview with the newest member of the Cleantech community – Mr. DoruDragomir who has just started the Cleantech Romania platform! 3
  4. 4. What happened in the Bulgarian Cleantech Community in 2012? : 2012 – SOME GREEN BUSINESS EVENTS :: BULGARIA Forum for South-East Europe Green Days 2012 Forum Green Economy 2012 Green Day Forum Green Business Forum Sustainability Forum Sofia 4
  5. 5. 2012 - CLEANTECH BULGARIA IN PARTNERSHIPS PARTNERSHIPSOME OF THEM WERE::SOFIA SUSTAINABILITY FORUMPASSIVE HOUSE BULGARIAHOW TO GROWSOFIA DESIGN WEEK 2012 - LINK TOGETHER 2GCCA LATER STAGE AWARD 2012, AtlantaENVORITECH & SLEAN ENERGY INVESTOR SUMMIT 2012, LondonEUROPEAN CLEANTECH CHALLENGE 2012GREEN ACADEMY TRAINING /AVAILABLE IN BULGARIAN/EARTH HOUR 2012 5
  6. 6. 2012 – WHAT DID WE ACHIEVE IN ONE YEAR?Green Office Week 2012 - Changing the organization from the inside out Green Office Weekimproves the working environment, integrates guidelines for environmentally sustainable behaviour,motivates the employees and creates conditions for a more pleasant and healthy workingenvironment. In the campaign participate 40 Bulgarian big and medium companies and coveredabout 15 employees.Green HR Forum 2012 – An event is focused on current trends in the management and developmentof sustainable business in Bulgaria in the Green HR field. The aim is to enforce the implementation ofsustainable "green" practices in the companies. Over 70 professionals took part in Green HR Forum2012 and exchanged their views about the “green” path that the Bulgarian business should passthrough to achieve sustainable results.Xmas Recycling Day 2012 – Between 26 November and 14 December, when Christmas is already atour door-steps, the companies encourage responsible behaviour of their employees, trough creatingrecycled Christmas office decorations, saving resources and motivating sustainable consciousness.You still have a chance to participate and create extraordinary Christmas mood in your offices. Don’tmiss it! This project was participated in European Week for Waste Reduction 2012.Green Bulgaria Award - Cleantech Bulgaria won a prize of Ministry of Environment and water GreenBulgaria 2012 for the successful initiative Green Office Week 2012. 6
  7. 7. THE IMPORTANCE OF SUSTAINABILITY – DIVERSE PERSPECTIVES CLEANTECH ENTREPRENEUR : BOGDANA RAKOVA Expertise: technology, innovation, artificial antelligence and robotics The PowerHome team led by Bogdana Rakova won the third edition of the Sofia StartUP Weekend series – an integrated open-software and hardware solution for smart management in household.Is "green economy" becoming a need?Slowly, at least in Bulgaria, however worldwide more and more people and emerging companies arelooking into cleantech. I think we need to take full advantage of the latest technologies, talk moreabout the possibilities and follow other examples we can find in Germany, New Zealand, Californiaand others. Innovative emerging companies are bringing these latest technologies closer to thepeople by making them more understandable and easy to manage. The truth is that mosthomeowners could make changes to save energy, but don’t know which changes would make thebiggest difference. As a whole in the next 15 to 20 years clean technologies will definitely be part ofour lives and we would have tons of ways to manage them.What does sustainability mean for you and your organization?For me the future of cleantech is into improving energy storage and moving towards distributedenergy architecture. The current centralized architecture of energy is one that Edison,Westinghouse, and Tesla would feel comfortable with: large power plants ‘out there’ that generateelectricity and millions of smaller ratepayers consuming it. We get a monthly, sometimesindecipherable, and that’s the extent of our communications with the power provider or even ourunderstanding of our own power usage. What is emerging is a more distributed architecture whereindependent power producers are generating electricity from thousands or millions of smallerpower plants.Which are the "green" steps in the development of your organization?The project I am working on now is all about being more energy efficient at home. Our idea is tobuild a platform that would help people leverage the versatility of the smart grid by giving themmore granular access and control over their consumption. We are looking at this from theperspective of giving the consumers a way to create measure and compare household specificscenarios to save energy. We’re looking at the home as a key place that needs to change and help usbe more energy efficient. Our smart home-automation system relies on our own microcontroller(based on open source hardware controller from Olimex) which can work together with existingmeasuring devices and sensors. We would use Artificial Intelligence to learn from the everydayusage and data generated by these otherwise passive devices. The measured data is anonymouslycollected and analyzed on our servers where we run numerous algorithms to identify behavior 7
  8. 8. patterns and to generate templates which we push back to each household to help them seamlesslyreduce the energy consumption without losing comfort. We call it Hut grip - a way to get a grip onyour home and make it more energy efficient! CLEANTECH BUSINESS OLGA STOICHKOVA Expertise / Position : Leasing Manager of Sofia Airport Center, Tishman InternationalIs "green economy" becoming a need?The green economy is absolute necessary in modern business. In addition to reducing operatingcosts, which has a direct financial impact through green policies the company take a position front ofcustomers as a socially responsible one. Employees are bound to cause. All this builds long-term andstable position for the company.What does sustainability mean for you and your organization?For us sustainability is several things: value, purpose, need, a better future.Which are the "green" steps in the development of your organization?This is not a step, but way. The investment in green buildings is the result of long-term strategicplanning and we create this project in mind for the future.Do you expect a positive change in the field of clean technologies in Bulgaria?Is no other way and change will happen. 8
  9. 9. CLEANTECH BUSINESS LIDIYA KOSTOVA Expertise / Position : PhD, owner of Interiorprotect Ltd.Is "green economy" becoming a need?Business is facing the inevitable break down of the old economy model of ever-greater consumption,with growth at any price. Globally, there is already clear features that differentiate sustainablecompanies from the rest, including a clearly stated long-term view on their integration within thecommunity they operate in decision-making; taking moderate risks; applying resource-consciousstrategies, LEAN management and sustainable metrics, and learning from the environment.What does sustainability mean for you and your organization?I established my company, Interiorprotect Ltd. in 1997 as an innovative enterprise for development andproduction of flame retardants applied for fire protection of textile materials. And since I stronglybelieve that innovations and environmental consciousness are the key to progress, all the products andservices that the company is developing are inspired by this concept.Which are the "green" steps in the development of your organization?Actually, the success of my company is based extremely on its eco-orientation.Our products are ecologically appropriate and environment friendly, they are biodegradable andcompletely harmless with no acute toxicity to mammals, neither by oral, dermal or inhalation exposure.It is also not classified as a skin or eye irritant. There are no indications of allergenic or mutagenicpotential.So, I would say that Interiorprotect Ltd. owes it success entirely on thinking green, because our fireretardants managed to do an international breakthrough because they surpass their competitors on theglobal market namely with their environmental performance indicators.Do you expect a positive change in the field of clean technologies in Bulgaria?Positively yes! 9
  10. 10. CLEANTECH NGO SECTOR VLADIMIR DIMITROV Expertise / Position :: Managing director of Bulgarian Association of RecyclingOne of the most frequently cited definitions of green economy is the program of the United NationsEnvironment Programme (UNDP), stating that this is an economy that results in improved humanwell-being and social equity, with significantly reduced environmental risks. The increasingconsumption of resources, which we have seen in recent times resulting in the need for theirrevision and preparation for reuse. For example, metal - metal is a commodity that can be recycledan unlimited number of times, quality and value are preserved. Different types of metals arediscarded everywhere - such as auto parts, cans etc. Most of these materials can be recycled andhave great value. Recovering metals also benefit the economy, which helps the environment.Through this recycling conserves natural resources such as metal is reused for different purposes.This saves energy. Eco topic became all the rage in todays economy - a new fashion industry, foodand all of our lives. How sad is that it was therefore forced us to look around us. Each subsequentissue of nature bothers us more and more. Eventually we got to the situation we have now. Allshould become - responsible, but somehow late. The end result is there - steady decline in naturalresources, so do not waste your vain and recycle! 10
  11. 11. Cleantech Bulgaria Monthly Investment Research: Clean Energy Investments December 2012Highlights Gleantech Indices (Q3’ 2012)Global investment in clean energy totaled USD 56.6bn in the thirdquarter of 2012. This was down 5% on the second quarter and 20%lower than in Q3 2011 Green Energy M&A ValueAsset finance of utility-scale projects such as wind farms, solar parks and (Q1’ 2011 – Q3’2012)biofuel plants fell 10% to USD 32.3bn.. Rebased - Q1 2011 = 100Venture capital and private equity investors ploughed just USD 1.3bn 140 130into clean energy firms in Q3 this year, down 20% on the second quarter 120and 34% lower than the third quarter of 2011. Among the few large 110deals were a USD 200m funding round for US installer Solarcity 100Corporation, and a USD 104m round for biofuel developer Elevance 90Renewable Sciences, also of the US. 80 70Investment in quoted clean energy companies on the public markets has Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012remained very sluggish. It totaled just USD 1.8bn in the third quarter,although this was enough to represent an increase of 47% on the Public Market Green Energy Transactionssecond quarter and 28% on Q3 last year. (Q1’ 2011 – Q3’2012)Clean energy share prices bobbed around in Q3, but ended up almost Rebased - Q1 2011 = 100where they started. The closing figure of 116.69 for the WilderHill New 250Energy Global Innovation Index, or NEX, which tracks 98 clean energy 200stocks worldwide, left it 8% down for the year as a whole. 150A sector split of the Q3 investment total shows solar leading with USD33.8bn, up 1% on Q2 but down 22% on the third quarter of last year; 100wind is second with USD 15.5bn, down 26% on the quarter and 23% on 50the year; small hydro (projects of 50MW or less) is a distant third with 0USD 3.5bn; biomass and waste is fourth at USD 2bn, energy-smart Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012technologies fifth at USD 800m, and biofuels sixth at just USD 700m. Green Energy Project FinanceA geographical split shows investment in the US in Q3 at USD 7.3bn, (Q1’ 2005 – Q3’2012)down 28% on Q2, and 62% on Q3 2011. China saw investment slip 17% Rebased - Q1 2011 = 100on the quarter to USD 14.8bn, although this was up 6% on the same 190three months last year. India’s investment fell 16% on the quarter to 170USD 1.5bn and was 60% down from the same quarter in 2011, while 150Brazil showed a 94% increase on the quarter to USD 1.9bn, some 24% 130up on the year. Investment in Europe was USD 18.2bn, down 2% on Q2 1102012 and 29% on Q3 2011. 90The challenges facing clean energy in the third quarter continued to 70include policy uncertainty in key markets such as the US, the UK and Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012Italy, and the dampening effect of low sector share prices on publicmarket and venture capital investment. In addition, the recent sharpfalls in the costs of wind and solar photovoltaic technologies have meantthat the same megawatt capacity can now be purchased for significantlyfewer dollars. 11
  12. 12. I. General Green Investment OverviewGlobal investment in clean energy totaled USD 56.6bn in the third quarter of 2012. This was down 5% on thesecond quarter and 20% lower than in Q3 2011. The drop was partly due to weaker figures from the US andIndia as well as a lull in wind farm financings. The new figures suggest that the full-year 2012 figure forinvestment in clean energy is likely to fall short of last year’s record USD 280bn. If so, 2012 would be the firstdown-year for world investment in the sector for the last eight years. As a whole, investment was slightly downin Q3 2012 as logical response to some negative regulatory developments (especially in Europe and the US) inthe second half of 2012 with largest investments going to the Asia-Oceania region. Within countries, largestgreen energy investment projects went to China, Brazil and Morocco. Although investments in Europe and theUSA have been slightly decreasing, the long – term effect of the new regulations is still unclear and it could notbe expected that it will change the strong appeal of RES assets to a variety of investors. There have also beensome drops across all different investment classes – M&A, project finance and venture capital/private equity,yet the effects are far from uniform as some investment classes showed upward movement. Figure 1: Total Global Investment in Clean Energy (2011-2012) All Investment in Clean Energy (2011-2012) USD bn 80 71.8 70.7 70 58.0 59.6 60 53.9 56.6 48.0 50 40 30 20 10 0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Source: Bloomberg New Energy Finance Main challenges for the development of global green energy industryThe challenges facing clean energy in the third quarter continued to include policy uncertainty in key marketssuch as the US, the UK and Italy, and the dampening effect of low sector share prices on public market andventure capital investment. In addition, the recent sharp falls in the costs of wind and PV technologies havemeant that the same megawatt capacity can now be purchased for significantly fewer dollars.Questions over policy-makers commitments, an atmosphere of fiscal austerity in Europe and the USA and thecomparatively low clean energy share prices are decreasing investor enthusiasm. In addition, sharp falls in windand solar photovoltaic (PV) technology costs mean the same megawatt capacity can now be bought for fewerdollars.Clean energy trade tensions escalated. The European Commission launched an anti-dumping investigation ofChinese PV equipment makers. The US unveiled preliminary duties on Chinese-made wind towers. China hasstarted an anti-dumping and anti-subsidy investigation of US polysilicon producers. The World TradeOrganization has appointed a dispute panel to examine US tariffs on Chinese-made PV equipment. 12
  13. 13. Manufacturing Components Market Developments Solar PV equipment prices in Q3 hit new all-time lows with the global average spot price for polysilicon falling below USD 20/kg. Chinese-made multicrystallline modules slipped 9% from August to September alone to USD 0.77/W. The global price hit USD 0.88/W. Wind turbine prices are leveling off and actually inched up 2% during the first half of 2012, as buyers turned to newer, higher efficiency models that are pricier. Turbines for delivery in H2 2013 are now averaging EUR 0.95m/MW (USD 1.23m/MW). The lithium-ion battery market remains massively over-supplied suggesting a decline in electric vehicle prices is on the way soon. II. Geographic Distribution of Green Investment ActivityFigure 2:Geographic Distribution of Green Investment Activity: Geographic Breakdown USDbn ASOC 25.2 Americas 10.4 EMEA 21.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0Source: Cleantech EMEA The quarter to quarter investment fall was not spread evenly across the three geographic regions. Total investment in the Europe Middle East and Africa (EMEA) region actually rose to USD 21bn in Q3 from USD 19.6bn from Q2, but was off substantially from the USD 26.2bn invested in Q3 2011 and the all-time high quarterly investment of USD 29.8bn in Q2 2011. EMEA investment was bolstered by financings of major solar thermal and wind projects in Morocco. 13
  14. 14. Americas Investment in the Americas (AMER) region slipped to USD 10.4bn in Q3 from USD 13.8bn in Q2 and from USD 22bn in Q3 2011. The US was largely responsible for the regions decline as total investment in the country fell to USD 7.3bn from USD 10bn in Q2 and from a record USD 18.9bn in Q3. Looming expiration of the federal Production Tax Credit (PTC) supporting the wind sector was at least partially to blame. Meanwhile, Brazil attracted USD 1.9bn in the quarter, up 94% from the prior quarter and up 24% from the same year-earlier period. ASOC Investment in the Asia-Oceania (ASOC) region slipped only slightly to USD 25.2bn in Q3 from USD 26.1bn in Q2 but was up substantially from the USD 22.6bn invested in Q3 2011. China attracted USD 14.8bn in Q3, down from USD 17.9bn in Q2 but up from USD 14bn in Q3 2011. India’s investment fell 16% on the quarter to USD 1.5bn and was 60% down from the same quarter in 2011. III. Distribution by Investment Class M&A M&A include only acquisitions of already existing plants, green energy utilities & related assets mainly by other energy/utility companies (without institutional investors). By the end of Q3 2012, the M&A market continued showing signs of cooling. In the final quarter, the value of announced M&A acquistions declined 18% to USD 8.5bn compared to USD 11.7bn in Q2 2012. Table 1 shows the largest transactions below (with announced values) highlights the sector’s appeal to a broad range of acquirers, including utilities, financial investors and corporates around the world.Figure 3: Global Green Energy M&A Transactions – acquisitions only Acquisition Transactions (2011-2012) USD bn30 27.62520 16.7 17.5 16.015 13.4 11.710 8.5 5 0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012Source: Bloomberg New Energy Finance 14
  15. 15. Table 1: Global Most Significant M&A Green Energy Transactions (May’2011- Q3’2012) Name of Target Country Sector Value /mln/ Acquirer(s) Acquirers country Stake (%)SunPower Corp. USA Solar $1,380.00 Total SA France 60Wind farms (480MW) - Iowa, Texas and others USA Wind $900.00 Algonquin Power & Utilities Corp. Canada 100Wind farms (443MW) - Castilla y Leon province Spain Wind $877.00 Bridgepoint UK 100 Marubeni Corp., Innovation NewtworkSeajacks International Ltd. UK Wind $850.00 Japan 100 Corp. of JapanWind farm (277MW) - Borkum Riffgrund 1 Germany Wind $836.00 KIRKBI A/S, Oticaon Foundation Denmark 50Hansen Transmissions International NV Belgium Wind $725.00 ZF Friedrichshafen AG Germany 26NVP SA Brazil Wind $621.00 CPFL Energias Renovaveis SA Brazil 100Solar plants (86MW) - Ontario Canada Solar $454.00 TransCanada Corp Canada 100Desenvix Energias Renovaveis SA Brazil Wind $440.00 Statkraft Norfund Norway 40.65Nuova Rete Solare Srl Italy Solar $376.00 Terra Firma Capital Parnters Ltd. UK 100 Demeter Partners Cube InfrastructureRenewable Power International SL Spain and Portugal Hydro $330.00 France 100 FundLac Alfred Canada Wind $330.00 Enbridge Inc. Canada 50 Marubeni Corp., Innovation NewtworkGunfleet Sands UK Wind $324.00 Japan 49.9 Corp. of JapanWind farms (140MW) - Galicia, Castilla-La Spain Wind $315.00 Canepa Asset Management Spain 100Mancha, Catalunia and La Roja Source: KPMG Table 2: Q3 2012 Most Significant M&A Green Energy Transactions in Europe Name of Target Country Sector Value /mln/ Acquirer Q-Cells SE Germany Soar $313.10 Hanwha Group Wind farm (16 MW) - Bagmoor, Wind farm (65MW) - Scout UK Wind $234.20 Munich Re Moor, Wind farm (21.25 MW) - Tir Mostyn First Reserve Corp., Crescent Capital, Solar plant (60.40 MW) Karadzhalevo Bulgaria Solar $219.90 Acwa Power European Investment Bank, Trattamento Rifiuti Metropolitani Spa Italy Recylcing & Waste $196.50 Undisclosed, BNP Parisbas SA Wind farms (900MW) - Gode Wind Germany Wind $193.30 DONG Energy A/S Source: Clean Energy Pipeline Project Finance and Venture Capital/Private Equity Investments Project finance statistics include all greenhouse investments e.g. financing the brand new projects (solar/wind/biofuel plants) throughout the world. Venture capital/private equity investments encompass investments by institutional investors only. Asset finance of utility-scale projects such as wind farms, solar parks and biofuel plants fell 10% in Q3 to USD 32.3bn from the prior quarter. There was a bigger decline when compared to Q3 2011, when asset finance reached USD 49.5bn thanks in large part to the final rounds of the American Reinvestment and Recovery Act, (ARRA) which funded innovative technology projects under the US federal loan guarantee program. The location of some of the biggest projects financed highlighted a geographical shift, with established markets such as the US, Europe and China losing momentum while newer markets in South America, Asia and Africa picked up steam. For the top project finance investments for the last 18 months are present in Table 4. The top three projects getting the financial go-ahead between July and September 2012 were: 15
  16. 16. Masen Ouarzazate solar thermal plant phase one in Morocco, at 160MW and USD 1.2bn; Nareva and International Power Tarfaya wind farm, also in Morocco, at 300MW and USD 563m; Verace wind portfolio in Brazil, at 258MW and USD 497m. The fourth largest asset finance deal was a Chinese wind farm, and the fifth an Australian wind project. The largest financing of undisclosed value was the Ukrhydroenergo Dnieper River Small Hydro Portfolio consisting of 22 projects with a cumulative capacity of 980MW in Ukraine. Venture capital and private equity investors ploughed just USD 1.3bn into clean energy firms in Q3, down 20% from Q2 and 34% lower than Q3 2011. Among the few large deals were: USD 200m funding round for US installer Solar City Corporation USD 104m round for biofuel developer Elevance Renewable CorporationFigure 4: Green Energy Project Finance Investment (2011-2012) Project Finance Investment (2011-2012) USD bn 60 49.5 50 47.3 38.4 40 36.0 32.3 29.5 30 24.0 20 10 0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012Source: Bloomberg New Energy FinanceFigure 5: Green Energy Project Finance Investment (2011-2012) – GeographicalBreakdown Total Project Finance Q3 2012 - Geographical Breakdown USD bn 14 12.7 12 10 8 6.0 6 3.8 3.6 4 2.1 1.8 2 1.4 1.0 0 China Europe United Other Other Brazil India Other States ASOC EMEA AMER Source: Bloomberg New Energy Finance 16
  17. 17. Figure 6: Green Energy Project Finance Investment (2011-2012) –SubsectorBreakdown Total Project Finance Q3 2012 - Subsector USD bn Breakdown 16 15.1 14 12 11.2 10 8 6 3.4 4 2.0 2 0.4 0.2 0.02 0Source: Bloomberg New Energy FinanceTable 3: Most Significant Global Project Finance Investments (May’2011-Present) Name of Target Country Sector Value /mln/ Deal Status Transaction TypeNareva & International Power Tarfaya Turkey Wind $563.30 Completed New buildDatang Aqi Hanshan Wind Farm Site China Wind $463.50 Completed New buildTrustPower Snowtown Wind Farm Phase II Australia Wind $459.00 Completed New buildCanadian Hills Wind Farm USA Wind $440.00 Completed New buildSouth Korea West Sea Offshore Wind Farm Phase I South Korea Wind $373.00 Completed New buildKyocera Nanatsujima PV Plant Japan Solar $280.60 Completed New buildHebei Construction Weichang Yudaokou Village Wi China Wind $332.80 Completed New buildNorthland Power Eastern & Central Ontario PV Port Canada Solar $280.60 Completed New buildEnergisa Renascenca Wind Portfolio Brazil Wind $278.60 Completed New buildMt Merser Wind Farm Australia Wind $267.00 Completed New buildMVV Umwelt Plymouth Waste-t-Energy Plant UK Biomass & Waste $244.54 Completed New buildLodos Elektrik Karaburun Wund Farm Turkey Wind $227.00 Completed New buildERB Dow Aratu Biomass Plant Brazil Biomass & Waste $133.00 Completed New buildNewcom Salkhit Wind Farm Mongolia Wind $122.10 Completed New buildJGC Oita Sunflower PV Plant Japan Solar $100.80 Completed New buildReNew Jatj Wind Farm Idia Wind $88.21 Completed New buildRP Global Danilo Wind Farm Croatia Wind $86.60 Completed New buildDatang Eryan Wind Farm Phase IV Enzhaoshan China Wind $75.30 Completed New buildGuodian Yuanmou Leiyingshan Wind Farm Phase I China Wind $74.00 Completed New buildPdVSA Guajira Wind Farm Phase I Brazil Wind $70.00 Completed New buildSource: KPMGIV. Quarterly Feature: Policy Framework & Outlook for the SectorDevelopment As is the case with businesses at large, renewable energy production did not remain unaffected by the current crisis. In addition, the current unfavorable policy changes surrounding the green energy industry also have some negative impacts however the long-term effect of this is still unclear. In terms of new investment and institutional investments, USA will continue to be the leader while Asia is most active in building the RES sector as well. So-called “frontier markets” such as countries in Latin America and the Middle East show exponential growth trends. 17
  18. 18. Europe Policy makers in a number of markets where clean energy has traditionally thrived continued to scale back subsidies and other supports through Q3. In the cases of heavily leveraged nations, fiscal austerity concerns are partly to blame. In others, policy-makers are simply seeking to stretch taxpayer or ratepayer funds further while keeping pace with the extraordinary drops in clean energy costs. Until recently, tax policy as it has been applied by policy-makers around the globe has been used to subsidize clean energy or punish dirtier forms of generation. Tax credits have been applied in the US and elsewhere to spur growth. Carbon taxes, climate change levies and the like have always encompassed the "polluter pays" principle and been used elsewhere. In Q3 2012, however, policy-makers in three EU nations have replied to somewhat populist claims for the cost of the share of renewable energy in utility bills and further began to regard the clean energy sector as a source of potential tax revenue generation.Table 4: Q3 Green Energy Tax Introduction in EuropeCountry Date of announcement Tax Date of enforcementSpain 14-Sep 6% additional tax on revenues Subject to parliamentary approval generated from electricityBulgaria 17-Sep Up to 39% on solar and 10% 18 September, immediately after onshore wind – additional tax on announcement revenues from renewable electricity to pay for "difficulties in integrating renewable power supply"Greece 28-Sep Temporary tax on renewable power Not yet specified producers proposed by the deputy energy minister Asimakis PapageorgiouSource: Relevant National Ministries All three measures supposedly aim to help utilities and transmission system operators cope with the rising costs of absorbing increasing supply of intermittent, renewable power – whether it is the tariff cost (Spain) or the increasing costs of balancing electricity supplies (Bulgaria). While the proposed tax in Spain is moderate and was expected by the industry, the radical announcement in Bulgaria and its retroactive effect were an unpleasant surprise to the PV sector. This is visible throughout Europe and beyond, taking the form of a faded support for renewable energy development. Yet, some countries are willing and able to maintain their transition toward renewables as a way to sustainability in the long run, while others seem poised to throw out the baby with the bath water. 18
  19. 19. Germany is an example of the former case, holding firmly to its decision to move from nuclear to renewable energy production, despite the price associated with such an abrupt move. Germany has gradually reduced incentives for RES development, while not killing the industry and breaking World records in renewable energy production in the process (i.e. on May 26, 2012, the country met 50% of its midday electricity needs by generating 22GW per hour from solar). The Germans proved more resilient in their transition to renewables retaining popular support for RES and against nuclear, as compared to the British population, for example. Once a forerunner in the renewables discourse, the UK is currently lost in rhetoric, and its self-proclaimed “greenest government ever” has been most active in watering down more decisive action on climate change at the EU level. Newer member countries also stand divided in their RES discourse. Romania proclaimed its intention to substantially develop its RES industry (e.g., solar) in the coming few years, while Bulgaria is essentially driving out RES investors with its new law on renewable energy. Further, among other forerunners in the North of Europe, Norway most notably retains a sizeable support for the development of renewable energy production not only at home, but also abroad.AmericasAcross the ocean, the USA in a unique position with a shale gas revolution that generally reduces the urge todevelop RES. Yet, despite heavy critique over subsidizing the RES industry and a handful of bankruptcy cases of solarproducers, President Obama has reiterated his support for developing US’ renewable energy sector as a long-termstrategy for energy independence and sustainability. Moreover, together with Israel, the US retains its support forR&D in the field of renewables, with some of the most innovative ideas (e.g., solar highways or double-sided solarpanels that can be mounted to highway noise barriers) stemming from these two countries.ChinaIn the midst of the above rhetoric, China is quietly building its own RES sector (e.g., especially notable are its ratesof installing solar capacity). China is well suited to do so, as the biggest player on the solar panels market, a countryfaced with a rapidly growing demand for energy, and a nation having the necessary financial resources and humancapital to develop its RES sector. India has opted for wind, while Japan is yet to decide on its post-Fukushimadiscourse. All in all, in light of climbing prices of conventional energy sources (i.e. with the exception of US shale gas,the exploration of conventional sources through unconventional means is expected to increase prices), sustaining atransition toward renewable energy production (the prices of which are notably falling) is a long-term strategy for astable and more sustainable development. 19
  20. 20. FORTHCOMING CLEANTECH BULGARIA INITIATIVES IN 2013Green Business Network The new business club in Bulgaria. Green Business Network encouragebusiness representatives to develop sustainable corporate culture issues, green jobs, healthy environment,care for the environment and employees, new business perspectives, opportunities and markets. Host ofthe meetings will be Sofia Airport Center – the first green business building in Bulgaria.Green Academy Green Academy is focused on the development and application of innovative ideasabout organizational culture and change in the environmental context, based on a guiding philosophy ofclient-based innovation. The Academy promotes new thinking on achieving breakthroughs in higherperformance, developed through active collaboration with clients and thought leaders around the world.The project is focused on 3 main fields: Green Management, Green Jobs and Green Future.Waste Office Week 2013 This will be the second part of annual initiatives which are dedicated tothe employees in different Bulgarian companies and their environmental responsibility. The initiative willbe accompanied by interesting and motivating materials, online communication architecture foremployees, recycling challenges and workshops. The concept is based on past Green Office Week.Open Innovation Challenges Innovative online approach used in the global market as one of themost successful ways for companies to reach the most innovative solutions for their business, relying onexternal experts and specialists. The method makes it possible to save financial and human resources andhas a strong image effect. We have the pleasure to introduce you our new follower! Mr. Doru Dragomir is managing partner of one of the leading HR consultancy companies in Romania.Inspired by the high start of Cleantech Bulgaria, Mr. Dragomir decided to initiate the creation space for thegreen community in Romania starting from 2013.We wish him good sustainable start! Here are some thoughts from Doru for the importance of sustainabledevelopment: 20
  21. 21. CLEANTECH INTERNATIONAL DORU DRAGOMIR Expertise / Position: Founder of Cleantech RomaniaIs "green economy" becoming a need?Let’s start the discussion by clarifying this term. What is the “need” for our economy and especially for our society,and is this different from what the economy and society “want”? Because, if we are looking around us we are seeingthat most of the new technologies that we are developing are created in order to undo the harm that older ones aremaking. And there is also another important point that we have to take in consideration: all this new technologies,more efficient in making new products, are helping the economy to produce more things, therefore unit price goesdown and consumption goes up. If we agree to say green economy means any type of innovative technology oractivity that is sustainable for sure we can say is a need.What does sustainability mean for you and your organization?I don’t believe that can be more than one definitions for the term of sustainability. Or at least this term should havesame meaning and that is the only solution for our society for getting to the next level. In Cleantech Romania webelieve that the new challenge in our life and in our economy is the art of keeping the life standards that mankindhave without harming the environment around us. And this is why our organization mainly exist, to link the interestsof all the stakeholders in economy and to protect our environment in the process.Which are the "green" steps in the development of your organization? We in Cleantech Romania do not believe in extreme solutions, we believe in development in a sustainable way thatwill help us to have the vital resources we need for getting to our goals. We are still at the beginning of our journey,but we all believe that innovation is the right answer for the future of all organizations. And when I say innovation,that not necessary mean to invent new technologies but to think of the small details that can make the differenceand can make you or your organization to become more productive with less resources.Do you expect a positive change in the field of clean technologies in Romania?Romania already made some steps in the right direction. And when I’m saying Romania I’m referring to most of thestakeholders of Cleantech Romania. Investors in green areas are already present in Romania, in all green energyfields – wind, water, PV. Our construction field developed already a couple of projects that include Green Buildingscertified by different international authorities. Most of the new construction projects in Bucharest especially aregreen buildings. A big number of companies are starting to involved themselves in green projects, projects dedicatedto regenerate the environment. At the legislative level Romania comply with all EU laws regarding environment.Also very important is the level of awareness among people this topic has. There are a lot of projects that weremade or still are in progress that started as personal ideas of individuals and were considered by different entities –companies, NGO, others – good programs and where putted in practice. 21
  22. 22. ONLINE PLATFORMCleantech Bulgaria is also the first professional network for clean technologies and sustainabledevelopment. We want to introduce you several free charge options for your active involvement andcooperation in the platform which you can use: In the Marketplace section you can:Create your Company or Service Provider profile, extending your activities among a large Cleantechcommunity of professionals, entrepreneurs, companies and institutions.Post vacant positions in your company and reach high qualified specialists in the field of cleantechnologiesExplore new Cleantech projects in the field of clean technologies, renewable energy, energy efficiency etc. In the Community section you can:Publish and share news and knowledge, distributing important for the Bulgarian and global Cleantechcommunity informationAnnounce upcoming Cleantech eventsDiscuss current topics and create new contacts DISCLAIMERThis document has been issued by Cleantech Bulgaria (“Cleantech Bulgaria”), which is Authorised andRegulated by the Financial Services Authority in Bulgaria. Cleantech Bulgaria only undertakes engagementsinvolving “Professional Clients” and “Eligible Counterparties” as defined by the Markets in FinancialInstruments Directive (“MiFID”). This document has been prepared by Cleantech Bulgaria for informationalpurposes only. Although the information in this document has been obtained from sources which CleantechBulgaria believes to be reliable, we do not represent or warrant its accuracy and such information may beincomplete or condensed. This document does not constitute a prospectus and is not intended to providethe sole basis for any evaluation of the opportunity discussed herein. All estimates and opinions included inthis document constitute our judgment as of the date of the document and may be subject to changewithout notice. Changes to assumptions may have a material impact on any recommendations made herein.Cleantech Bulgaria will not be responsible for the consequences of reliance upon any opinion or statementcontained herein or for any omission. This document is confidential and is being submitted to selectedrecipients only. It may not be reproduced (in whole or in part) to any other person without the prior writtenpermission of Cleantech Bulgaria. 22
  23. 23. All rights reserved. Reproduction by permission only of the Author of this document, Cleantech Bulgaria.Copyright and Intellectual Property Right Ownership: This document and all Information therein, containsmaterial owned by either Cleantech Bulgaria or its Information Providers which is protected under copyright,trademark and other intellectual property laws. Neither this report nor any part of it may be reproduced,stored in a retrieval place or transmitted by any means, electronic, mechanical, photocopying, recording orotherwise without the prior written permission of Cleantech Bulgaria. Cleantech Bulgaria and its InformationProviders, as applicable, own the copyright to all Information and works of authorship. All trademarks,service marks, and logos used on the document are the trademarks, service marks, or logos of CleantechBulgaria or its Information Providers, as applicable. OUR TEAM Mariana Hamanova an entrepreneur, co-founder of the Expert Network CleantechBulgaria, which seeks to develop clean technologies and to support sustainable business in Bulgaria.Mariana is the creator and the "heart" of Cleantech Bulgaria. She is the engine of all projects,campaigns and Cleantech Bulgaria’s national and international partnerships.Mariyana graduated sociology in Konstanz, Germany and holds MBA degree. She returned toBulgaria and started with a group of young enthusiastic people the initiative Back2BG, already 4years old. Mariyana is Chairman of the Foundation "Identity for Bulgaria" and believes strongly inthe potential of the country.“The project Cleantech Bulgaria is the next challenge for me. Clean technologies and sustainabledevelopment topics are discussed widely nowadays and I believe Cleantech.BG platform givesBulgaria a great opportunity to build its Cleantech Community of companies, professionals andorganizations and makes the country a competitive partner on the European and the worldCleantech scene.” 23
  24. 24. Temenushka Spirova is a project manager at Cleantech Bulgaria, a conceptual andoperational contribution to any successful event or project organization. With never-endingenthusiasm she guides the interactive communication platform and unconventional initiatives andhelps to build the sustainable relationship between the companies and the environment.Temenuzhka graduated Public Administration at the Sofia University St. Kliment Ohridski. and aninternational master program "EU Law" - joint program of Sofia University and European universitycenter of Nancy, Strasbourg.Her previous work experience is related to event management and marketing in the field ofrenewable energy, energy efficiency and EU projects. At the moment she is a part of CleantechBulgaria team and is responsible for developing partnerships with potentional clients and partners-cleantech companies, NGOs and public sector. Maria Alexandrova project and open innovation manager in the Cleantech Bulgariaand is working for the development of the Web 2.0 based platform dedicated to the green businesscommunity.Maria has a degree in textile engineering technology at the Technical University in Sofia and Masterof International Economic Relations of the World Economy.She has extensive experience as a consultant on innovation development and transfer of technologyand managed a number of industry focused European projects. Among her professional interest arethe topics of innovation potential assessment, foresight prognostic tool and environmentalperformance. Martin Tsanov is an Analyst at the Economic Program of the Center for the Study ofDemocracy, while also contributing as a Research Analyst at Cleantech Bulgaria. Mr. Tsanov’s workat CSD covers macroeconomic competitiveness, financial flow analysis, energy security, greenenergy economics, hidden economy and anti-corruption. 24
  25. 25. Martin holds a MSc in European Political Economy, London School of Economics and PoliticalScience, London, UK and a B.A. degree in Political Science and International Relations, WhittierCollege, Los Angeles, California, USA.Mr. Tsanov worked as Research Analyst at Grisons Peak LLP in London (boutique M&A investmentbank) where he was responsible for designing the quarterly M&A research publication “ChinaOutbound Investments” by collecting information on M&A/equity and non-equity Chineseoutbound investments (including intergovernmental trade agreements and bank loans) and writingthe quarterly report documents. He also prepared macroeconomic newsletter materials forproprietary research clients on key macroeconomic trends and developments in the Central andEast Europe (CEE) region. 25
  26. 26. FOR THE NEWSLETTER SUBSCRIPTION CLICK HERE! CONTACTS We will be glad to answer your questions: Sofia, Iskar 4 Str., 2 floor / SOHO -Sofia Holistic Coworkig Company/ info@cleantech.bg 00359 882 972 255Please share us your opinion in Cleantech Bulgaria Newsletter Survey! 26

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