CVC Sustainable InvestmentsNovember 2007
Investing in Environmental Sustainability
Source – UNEP Global Trends in Sustainable Energy Investment 2007
ContentsContents
1. Introduction to CVC
2. Drivers of global carbon and environmental investing opportunities
3. Global response to the crisis
4. Opportunities in Australia
5. Opportunities in Developing Countries
6. Conclusion
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Source – UNEP Global Trends in Sustainable Energy Investment 2007 3
About CVC Environmental InvestingAbout CVC Environmental Investing
Part of the CVC Group – 5 funds, 20 year track record
Two funds specialising in environmental investing
$50m of “cleantech” assets
Leadership position – environmental investing
Invested in several leading environmental technologies
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Global Issues – Multiple Drivers Global Issues – Multiple Drivers
Climate Change
Resource Shortages
UrbanisationResource Security
Technology
Regulation and Policy
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Investment – a Significant Part of the SolutionInvestment – a Significant Part of the Solution
Addressing these problems requires the creation of a new “clean” infrastructure
This provides great opportunities for the companies developing the new technologies and services that make up this new “clean” alternative
Sectors Businesses / Technologies
Clean energy wind, hydro, geothermal, tidal, biomass, solar, low emission fuels
Biofuelsethanol, biodiesel, plastics to diesel
WaterWaste water treatment , black and grey water recycling
Wasterecycling and waste reduction technologies
Sustainable agricultureorganic farming and composting, resource and yield efficiency
Advanced materialsbiodegradable materials and plastic substitutes
Investment review methodologyInvestment review methodology
Positive Screen Negative Screen Commercial Screen
"Clean" Technology Destruction of native forests Management team
Renewable Energy and Energy Efficiency
Tobacco cultivation and tobacco-related products
Industry and product
Waste Management Systems and Technologies
Producing, distributing or selling alcohol
Market size and structure
Materials Development GamblingCompetitive advantage and strategic differentiation
Sustainable / Cleantech Business Models
Manufacture of cosmetics involving animal testing.
Risk assessment
Other Environmentally Beneficial Technology
Manufacture of nuclear or chemical weapons
Portfolio fit and co-investment
Source – UNEP Global Trends in Sustainable Energy Investment 20077
The ResponseThe Response
US$100 bn new clean energy investment in 2006
Out-performance of clean companies internationally
Over 1000 listed companies dedicated to environmental solutions
Over 100 dedicated ASX listed companies – brokers initiating coverage
Global Investment in Sustainable Energy
Source – UNEP Global Trends in Sustainable Energy Investment 2007
Investment by TechnologyInvestment by Technology
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Global Investment in Sustainable Energy – by Technology
38%
26%
10%
16%
4% 6%
Wind Biofuels
Biomass and Waste Solar
Other Renewables EE/Other Low Carbon
Source – UNEP Global Trends in Sustainable Energy Investment 2007
Investment by Type and RegionInvestment by Type and Region
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Source – UNEP Global Trends in Sustainable Energy Investment 2007
Current Energy Cost Structure in AustraliaCurrent Energy Cost Structure in Australia
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0
100
200
300
400
500
600
700
800
900
1000
$0
$50
$100
$150
$200
$250Cost ($MWh) CO2 kg/MWh
Source – UNEP Global Trends in Sustainable Energy Investment 2007
Australian Emissions Trading SystemAustralian Emissions Trading System
Bi-partisan support for emissions trading scheme
Designed to put an effective price on carbon emissions
Structure – “Cap and Trade” – effective price on carbon
Commences in 2012
Renewable and low emission technology – approximately 30,000 GwH per year - approx. 15% of installed capacity
$20 - $30 billion of new investment required
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Source – UNEP Global Trends in Sustainable Energy Investment 2007
Opportunities for investorsOpportunities for investors
Renewable energy developers
Energy efficiency and abatement product providers
Carbon trading and consulting
Investment into developing countries
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Source – UNEP Global Trends in Sustainable Energy Investment 2007
SummarySummary
Now a major, mainstream asset class globally
Mature technology assets are becoming infrastructure commodities
Significant opportunity in developing countries
Investment still policy driven - Australia lagging
Implementation of emissions trading scheme should see significant growth in Australia
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Source – UNEP Global Trends in Sustainable Energy Investment 2007 14
ContactsContacts
CVC SUSTAINABLE INVESTMENTS
Christian Jensen
+61 2 9087 8000
