By Gemma Childe on 28th May 2012
Investment bank Goldman Sachs is set to plough $40bn into the renewable energy sector over the next ten years.
The Wall Street firm will invest its own and its clients’ money as it predicts the demand for clean energy will continue to grow alongside increasing demand for worldwide power.
The investment bank is not new to the sector and in 2011 helped finance $4.8bn in clean technology companies globally, according to Reuters.
The news will bring new confidence to the renewable energy industry which has been hit by weakened government support globally and seen the shares of its listed companies fall.
Kyung-Ah Park, head of environmental markets at Goldman, said that in 2005 Goldman pledged to invest and finance $1 billion of environmentally friendly projects. By the end of 2011, the company had exceeded its goal, arranging $24 billion worth of financing and investing $4 billion into such projects.
Bill Green, senior managing director of Macquarie Infrastructure and Real Assets, said in a recent interview: “When investors deploy capital into renewable energy projects, they’re investing in proven technologies: solar PV, wind, biomass, geothermal. These technologies can be put to work today. Deals can be structured such so that investors can enjoy virtually bond-like, long-term returns with immediate yield.”
However, Goldman needs to work hard to prove its dedication to sustainability. Back in March it was accused by a former executive of “toxic and destructive” behaviour.
And in April, Goldman was given an “F” on a report card grading investment banks for their coal financing activities. While the bank monitors emissions from coal-fired power plants it owns in the United States, it is yet to have a stated policy on destructive mountaintop-removal coal mining.