Risks for Chinese Clean Energy Sector Receiving
By Sally Liu(Zero2IPO Research Center)
Triggered by the financial tsunami, the global economy has been in slowdown and facing more
risks. Nevertheless, Chinese clean energy industry has received lots of domestic and
international capitals. Against this backdrop, opportunities and risks do coexist in the very
sector. With the proportion of clean energy in the global energy consumption continuously
improved, and domestic and international VC/PE investors having deeper and deeper
concerns about this sector, what is the best choice for Chinese clean energy industry to go on
the way of its industrialization? The answer is to keep a rational investment attitude and
properly evade risks.
The roaring prices of traditional petroleum and coal, the widespread expansion of world
environmental issue rapidly and its negative impact on the sustained development in a long
run, these two factors jointly lead to the fast development of clean energy and energy-saving
technology. Meanwhile, clean tech industry① (in particular clean energy) has tremendous
growth potentials, which arouses the key attention from VC/PE investors.
Zero2IPO Research Center statistics show that 11 Chinese clean energy deals garnered
US$181.30 million VC/PE investment in 2006 and 7 deals received US$427.04 million in 2007.
The amount invested gained by 135.9% from 2006, which was partly contributed by the
enforcement of Renewable Energy Law of PRC in 2006 and the implementation of its related
support policies. In the first nine months of 2008, Chinese clean energy industry received a
collective US$772.26 million by 18 deals. Overall, VC/PE investors at home and abroad made
more investment in Chinese clean energy sector year over year.
There is some prediction claiming that by 2050 30.0%4 of Chinese energy demands will rely
on clean energy. Obviously, clean energy will bring the market with significant investment
opportunities and offer investors