U.S. Government Arranged Most Loans for Clean Energy in 2011

U.S. Government Arranged Most Loans for Clean Energy in 2011
Rows of heliostats stand in the sun at the solar plant owned by BrightSource Energy Inc., in the Negev Desert, in Israel. Photographer: Ahikam Seri/Bloomberg News

The U.S. government pushed ahead of development banks in Europe and Brazil to arrange the most financing for clean energy projects last year, distributing incentives from President Barack Obama’s administration.

The Federal Financing Bank completed 13 deals worth $10.1 billion for projects including BrightSource Energy Inc. Ivanpah solar thermal plant, according to a study of the industry’s top 20 lenders by Bloomberg New Energy Finance.

Spending was lifted by government support such as the Treasury Department’s 1603 cash grant program that expired in December and the Production Tax Credit offering 2.2 cents a kilowatt-hour of wind through the end of this year. The programs pushed U.S. funding for clean energy past China’s for the first time since 2008 last year, the London-based researcher said.

“Before anyone in Washington celebrates too much, the U.S. figure was achieved thanks in large part to support initiatives” that are expiring, Michael Liebreich, chief executive of New Energy Finance, said in a statement. “There may be a rush to get projects completed in 2012 followed by a slump in investment in 2013.”

In a separate list, Guy Hands’s Terra Firma Capital Partners Ltd. invested the most in the industry among private equity and venture capital funds. Innovation Network Corp of Japan ranked second. Kleiner Perkins Caufield & Byers completed the biggest number of deals.

Beating Brazil

The U.S. position among loan arrangers rose from third place last year, when it trailed the European Investment bank and Brazil’s development bank, known by its initials BNDES.

Banco Nacional de Desenvolvimento Economico e Social remained in second place this year after arranging deals including the $477 million Renova Energia SA Bahia Wind Farm Portfolio I financing. The EIB dropped to ninth place.

Bank of America Corp. came third this year after remaining outside the ranking in 2010. It arranged a $2.5 billion deal to finance the Project Amp solar plant by NRG Energy Inc., according to the New Energy Finance ranking.

Clean energy investment in the U.S. rose 33 percent last year to $55.9 billion while in China it increased 1 percent to $47.4 billion.

The U.S. cash grant, which offered as much as 30 percent of development and construction costs for renewable energy plants, expired on Dec. 31.

The Production Tax Credit is due to lapse at the end of this year. Vestas Wind Systems A/S, the world’s biggest wind turbine maker, said last week it may eliminate 1,600 jobs in the U.S. if the incentive is not prolonged.

The last time the production tax credit, or PTC, was allowed to expire, at the end of 2003, U.S. annual wind installations declined, to 397 megawatts in 2004 from 1,670 megawatts the previous year, according to data from the American Wind Energy Association.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE