This weekend, China encouraged state and local governments to set up venture capital firms to stimulate investment in technology startups. The Middle Kingdom is already overpopulated with foreign venture capitalists.
“China is becoming a booming market with lots of international players coming to hunt for deals,”says Don Ye, CEO and president of the China Environment Fund, the leading sustainability investment fund in China, of his foreign venture capital competition. Of the billion dollars in US venture capital that has been invested in China over the last year, clean energy technologies have not gone unnoticed. The Suntech IPO in December further heightened interest in clean technologies in China, says Ye.
Yet given the vast opportunity in China, investors are expecting vastly higher returns from the greening of the world’s most populous country. China’s economy is growing at a rapid 9 percent clip each year and energy demand is keeping pace. It has targeted 20 percent of its power to come from renewables by 2020. Ye says the CEF targets returns of 25 percent and over. Sectors CEF is investing in include energy efficiency (ESCOs), LEDs, solar and bio-diesel.
Expect the domestic competition among private equity investors to become even more intense. China is lifting its 10-month ban on IPOs and launching a market for small companies, similar to NASDAQ. Both these developments will mean more exit strategies for Chinese clean technology investors.
Source : Eco Log - ecofinance.blogware.com
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