Goldman sets $40 bln clean energy investment plan
By Lauren Tara LaCapra
May 23 (Reuters) - Goldman Sachs Group Inc plans to channel investments totaling $40 billion over the next decade into renewable energy projects, an area the investment bank called one of the biggest profit opportunities since its economists got excited about emerging markets in 2001.
Goldman executives said this week that demand for alternative energy sources will grow with global energy demand, and as big manufacturing countries, including China and Brazil, set more aggressive targets for reducing emissions. The bank plans to finance deals with clients' money and, to a lesser extent, its own funds.
Goldman, which plans to announce the new target at its annual meeting on Thursday, already invests in clean technology. In 2011, it helped finance $4.8 billion in clean technology companies globally, and co-invested more than $500 million in that area. The new target would average out to $4 billion a year, leading some analysts to minimize the target as more of a "charm offensive" than a new initiative.
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, said Kyung-Ah Park, head of environmental markets at Goldman.
The bank's new $40 billion target applies to investments and financings for solar, wind, hydro, biofuels, biomass conversion, energy efficiency, energy storage, green transportation, efficient materials, LED lighting and transmission.
Goldman has also pledged to reduce its own net carbon emissions to zero by 2020.
Stuart Bernstein, head of Goldman's clean technology and renewables investment banking group, compared the opportunity to technology investments in the 1990s or investing 10 years ago in fast-growing countries like Brazil, Russia, India and China, for which Goldman economist Jim O'Neill coined the term "BRIC" in 2001.
"This is another emerging opportunity we think will be quite large," Bernstein said. Continued...