In the past, when renewable energy was still niche, investments into renewables were ridiculed. Many investors thought of such investments as merely greenwashing, or that at best they would allow investors to feel they were ‘doing the right thing’. Low expected return rates resulted in low interest in such investments.
That has changed dramatically : investments in renewable energy are not only sustainable and protect the environment, but are also lucrative. So lucrative, that Shell has invested 1.7 billion US dollars into a new unit of the company that will specialise in renewable energy projects. Shell is not alone in this; Total recently bought out battery producer Saft for 1 billion dollars. Of course these investments are lower in comparison to traditional companies, but they recognise the biggest concern: oil is no longer profitable, and success in the long run requires independence from oil price shifts. BP has found this out the hard way after 2015 turned up a loss of 6.5 billion, in contrast to profits of 3.8 billion the year before.
The trend is similar for private investors. Suzanne Buchta, managing director, green bonds, at Bank of America Merrill Lynch says:
“I think they like to devote their fixed income dollars into things like cleaner air, more open space, better biodiversity protection and better use of resources.”
In 2016 so far, 21.7 billion dollars have been invested in green bonds, an increase of 78% from the year before. Even Toyota is joining in, offering private investors a bond to finance the development of hybrid electric cars, through which they’ve already collected 1.6 billion dollars. Often such bonds are quickly oversubscribed, as the demand is greater than the supply.
To meet this large investment demand, more supply is emerging. Among others, this comes in the form of crowdinvesting, which is what ecoligo offers: on the platform, private investors can invest in sustainable solar projects for business and industrial customers in emerging markets. In addition to receiving attractive returns of 5-8%, investments in ecoligo’s projects support renewable energy and sustainable economic growth in developing countries.