USA

Energy efficiency is a key investment area for the shift to a low-carbon economy. A Technical Working Group has been convened to develop eligibility criteria for the certification of energy efficiency related bonds under the Climate Bonds Standard.

The first meeting, via teleconference, was held on 20 July 2012.

This Working Group is focusing on the built environment; a separate Working Group will be convened to look at industrial and manufacturing energy efficiency.

Across Europe and a number of other regions bank recapitalisation pressures have led to a reduction in business and project lending - and thus reduced renewable energy lending.

This is a problem because the bulk of project finance (95% globally) comes from bank lending.

The development of a market for securitized renewable energy and energy efficiency assets and loans, allowing banks to quickly recycle limited loan capital, is going to be vital to ensuring banks deliver the project finance needed as we “green” energy systems.

>You have to hand it to the US IRS (Internal Revenue Service) – they seem to have a sense of humour.

Warren Buffet is a famous proponent of value investing and he surely received a sign of the value in solar investments over fossil fuels last week. The MidAmerican Energy $850m Topaz solar project bond we mentioned a couple of weeks ago was so successful that a second tranche is expected to cover the remaining debt of the project. The offer was oversubscribed by $400m which would have mopped up the total $1.2bn of debt in the project; Buffet is a shareholder in MidAmerican.

The newsletter “Asset-Backed Alert” carried a story on Friday suggesting that the US is about to see a revival of PACE (Property Assessed Clean Energy) municipal bonds, securitizing clean-energy loans to households.