Clean technology investments insulated against credit crunch, says Impax

Simm said that many areas of clean tech are experiencing high levels of investment, and that the trend was unlikely to be affected in the event of a recession given that the high levels are often underpinned by legally binding targets.

‘There are regulatory frameworks in many parts of the world that mandate minimum levels of installation of renewables over the medium term,’ he said.

‘For example, the EU is close to finalising legislation that will require that at least 20% of power is derived from renewable sources by 2010. This is expected to lead to at least €150 billion (£119 billion) of additional investment,’ he said.

He said wind and solar power were growing at 25-35% per annum worldwide, but claimed the waste sector was also experiencing similar growth as a result of legislative requirements.

‘The waste sector is also seeing huge capital expenditure, particularly as local authorities struggle to meet the legal requirements to divert biodegradable waste from landfill, and are therefore investing in recycling,’ he added.

Simm went on to argue that the sectors most vulnerable to the credit crunch apart from banking were those linked to consumer spending, but that the clean tech sector was likely to avoid being hit as it has minimal direct exposure to consumers.

He claimed that clean technologies that have built up a significant market presence represented an attractive, low-risk investment.

‘Advanced water treatment technologies have been operating successfully for decades to provide drinking water at large scale,’ he said. ‘Similarly, recycling and composting technologies are typically based on straightforward engineering and are backed by long-term warranties,’ he said. ‘Even renewable energy technologies can be low-risk for the investor – for example, most solar panels are guaranteed by their manufacturers for 20 years.’