Low Carbon Investors Pte Ltd is supported with financial assistance from the European Union.
TABLE OF CONTENTS
I. II.
LCI has a strong team with technological, operational and regional experience, supported by an Expert Panel, with investment professionals based in its office in Singapore and London.
The valley of death presents a major market opportunity:
o The investment strategy supports both forward and backward-integration across the supply chain to bridge the gap between innovation and infrastructure.
Simple model to deploy established technologies to the high growth markets in South and South East Asia
o Target territories are India, Indonesia, Malaysia, Singapore, Thailand and Vietnam
These markets are badly under-served by PE/VC and sources of conventional finance
o Low Carbon global PE/VC allocation globally of 5% to Asia, and less than 2% to our target markets
The launch of LCA Asia is supported by the Asian Development Bank and the European Investment Bank under their Technical Assistance Programme.
$80m
2006
$150m
2011
INFRASTRUCTURE
$40m
2010
$150m
2010
II. ASIA REPRESENTS THE LARGEST AND FASTEST GROWING MARKET FOR LOW CARBON COMPANIES
Population Growth
Global population expected to grow to 7 billion by 2012 and surpass 9 billion by 2050. Population growth in the Funds target countries is expected to grow approximately 6.3% between now and 2015. In contrast, the population growth in the EU and USA is forecast to be 2.5% in the same period. GDP Growth The GDP growth forecast of the Funds target countries is expected to remain at a strong level at an average annual rate of 6.4% between now and 2015 (compared to the European Average of target countries level of 1.7%).
Europe
Demand for Energy Demand for energy is expected to rise 40% between now and 2030. Southeast Asias primary energy demand is expected to expand by 76% over this period at an annual rate of 2.5%. Indias primary energy demand is expected to more than double by 2030, growing Asia (exc Japan and Korea) at an annual rate of 3.5%.
Rest of world
Region is underserved with less than 5% of worldwide investments in expansion and growth stage low carbon technology companies targeted to Asia in 2009.
Source: New Energy Finance
II. YET ASIA IS VIEWED AS A HIGHLY ATTRACTIVE REGION FOR CLEANTECH INVESTMENT OPPORTUNITIES
Fund Managers Views on Most Attractive Regions for Cleantech Investment Opportunities in 2011
80%
Proportion of Respondents
70% 60% 50% 40% 30% 20% 10% 0% Australasia North America Europe Greater China South America MENA Africa Asia
III. ASIAN INVESTMENT STRATEGY: BUILDING A DIVERSIFIED PORTFOLIO THROUGHOUT THE SUPPLY CHAIN
The clean energy transition from innovation to infrastructure has a major market inefficiency the valley of death This represents an attractive investment opportunity if:
Investment thesis focuses on distributed generation, waste to energy and energy efficiency Supply-side investment is combined with demand side facilitation
Minimises the trough in the typical J-curve of venture capital funds Enables the Fund to drive demand, rather than wait for it
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Technology Provider
Asset-backed companies
RATIONALE AND BENEFITS Highly constrained supply chain Low implementation risk Fast growing off-grid/rural market
Revenue generating within 1 year Attractive local incentives Sets de-facto standards and drives bankability
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1.6 billion people live without access to electricity. The mobile industry is experiencing unprecedented growth in these same off-grid regions of the developing world. GSMA estimates that nearly 639,000 off-grid based stations will be rolled out by 2012 and that there is a potential for 200,000 of these sites to be powered using renewable energy. Pilot project in Namibia with MTC and Motorola concluded a hybrid wind/solar solution had an ROI period of 3 years. Asian governments under increasing pressure to reduce oil and fuel subsidies. Average diesel price has increased by >50% in 12 months in many Asian regions. Providers has relied on diesel-powered generators for off-grid base stations, but increasingly apparent that diesel is not the optimal solution.
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