Green Energy Financing Cuts

September 23, 2008 1:56 pm SHawke In the News, Politics

Wall Street

How Wall Street Crisis May Affect Green Projects

The current shocks to Wall Street have led many to believe that financing for green energy projects will be largely scrutinized as the government attempts to clean up the current credit mess.

While many traditional forms of financing for these projects may be looking to turn their backs on green projects, venture capitalists and private equity firms may begin to step up to the plate and provide funding for environmental projects.

Investment in Renewables

However, even though the renewables sector is still popular among investors, risk-averse money managers may begin to make it hard for new companies to find investment capital. The current trend in the past couple weeks is to consolidate investments into backing their existing portfolios and only showing interest in investments that will guarantee them a strong, continual flow of returns.

If these conditions persist, only the strongest projects with clear returns will be picked up by investors while some revolutionary green development programs with unclear returns, such as research projects, may slip through the cracks. Thus, many government-sponsored projects, such as wind, solar and biofuel projects, may be unable to stand on their own.