Islamic Banks and Renewable Energy in MENA

Islamic banking involves activity that is consistent with the principles of sharia law. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money. It is also prohibited to invest in businesses that provide goods or services considered contrary to Islamic principles. Many Islamic banks were formed in the late 20th century. Now Islamic banks are are increasingly looking to support renewable energy including hydropower, solar and wind energy. Finance is a crucially important component of building a green infrastructure and this is especially true in the context of economic difficulty and political volatility we are seeing in the Middle East and North Africa (MENA).

As reported in an article titled “Tapping the Renewable Energy Market,” Islamic lending institutions that create financial mechanisms will benefit the growth of renewable energy. In the Middle East and North Africa (MENA) solar power projects are driving major new investment. With projects like Abu Dhabi’s Masdar City and the German-led Desertec Industrial Initiative (DII) it is expected that the region will be able to export energy throughout the region and into Europe. The Shams Power Co. alone is partnering in a $600 million investment to build one of the world’s largest concentrated solar power (CSP) projects.

Sustainable water projects are also garnering interest from Islamic banks. One bank in particular diverted part of its real estate holdings into trade finance which led to the first Shari’ah-compliant water-focused investment strategy.

Through the UK-based Islamic investment bank Gatehouse Bank Plc people can now invest in sustainable-oriented companies that offer technology, products and services throughout the water industry. Ocean water desalination is another area which offers tremendous potential for growth. Saudi Arabia is planning to convert all of its seawater desalination plants to renewable energy by 2019. This could attract more than half a trillion dollars in private sector investment over the next five years.

Recently, Islamic banking saw the release of a green financial certificates for the financing of climate change investments and renewable energy projects. The Climate Bonds Initiative, the Clean Energy Business Council of MENA, and the Gulf Bond and Sukuk Association launched the Green Sukuk Working Group to help market and develop the best practices to promote the issuance of green financial certificates.

There is good evidence to indicate that renewable energy investments are successful ventures for Islamic banks. Between 2004 and 2007, Islamic Financier, Bahrain-based Arcapita Bank made significant gains by investing in wind power, reportedly making it one of the most profitable investments in the firms history.

Islamic banking focused on cleantech like renewable energy could significantly contribute to regional sustainability and help to generate significant returns for investors.

© 2012, Richard Matthews. All rights reserved.

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Private Sector Green Investment

Global private sector investments in green technology companies totaled more than US$2.4 trillion between 2007 and the second quarter of 2011. These investments are growing at an annual rate of approximately US$1 trillion.

This information was provided by Ethical Markets Media, a Florida and Brazil-based company that provides data analysis and media production in an effort to grow the green economy. Their annual Green Transition Scoreboard (GTS) tracks environmentally-related private investment over time. The GTS reports include all non-government commitments to the green market worldwide.

Considering ongoing global economic difficulties, these are impressive numbers. As noted by said Hazel Henderson, president of Ethical Markets Media and creator of the scoreboard. “This updated total is noteworthy, as it comes in spite of economic uncertainty,”

Timothy Nash, lead researcher for the GTS said this trend extends to smaller deals. “Deals under $100 million...are significant as they demonstrate how thousands of different companies believe in the economic soundness of greening industries. These diverse companies are all investing in making systems and products more effective, using less energy and generating less pollution throughout the life-cycle,” Nash said.

“In a Wall Street versus Main Street discussion, the GTS shows how both types of investors increasingly are moving toward green technologies and processes,” said Rosalinda Sanquiche, executive director of Ethical Markets Media and editor of the GTS report.

© 2012, Richard Matthews. All rights reserved.

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Cleantech the Next Great Investment Opportunity

Cleantech is the next great investment opportunity. Huge amounts of investment wealth have been generated by technological innovations like the microprocessor (personal computing and mobile telecommunications) and the Internet (ecommerce and social networks). These two innovations have ushered in unprecedented investment growth in the 1980s and 1990s. According to many predictions, Cleantech is the next investment wave that may very well eclipse the first two.

The rise of microprocessors driven the herculean growth of companies like Intel (NasdaqGS: INTC), Microsoft (NasdaqGS: MSFT), Dell (NasdaqGS: DELL), and Qualcomm (NasdaqGS: QCOM). The rise of the Internet has catapulted companies like Facebook to become a 28 billion dollar business. The Internet has also driven the stock of companies like Apple (NasdaqGS: AAPL) Google (NasdaqGS: GOOG), Amazon.com (NasdaqGS: AMZN), and eBay (NasdaqGS: EBAY).

Cleantech is all about efficiency and this is a mantra for businesses looking to be more competitive in economically challenging times. The cleantech revolution is sure to grow as oil becomes more scarce and more expensive. Further, attempts to minimize the impacts of climate change will drive the price of cleantech stock.

Cisco Systems (NasdaqGS: CSCO) vice president Marie Hattar has said that cleantech will not only be the biggest innovation ever, but it will be 10 to 100 times bigger than the Internet.

Here are some forecasts for cleantech growth:

The global market for all cleantech applications, which includes energy storage and the smart grid, will double to $3.6 trillion by 2020.

Morgan Stanley (NYSE: MS) projects that the annual smart grid revenues will double by 2014 and then quintuple to more than $100 billion annually by 2030.

According to Cisco Systems, the communications portion of smart grid investment alone is expected to reach $20 billion annually.

Goldman Sachs sees smart grid investments totalling $750 billion over the next 30 years.

Wind power is projected to expand from $60.5 billion in 2010 to $122.9 billion in 2020.

Solar photovoltaics are projected to grow from a $71.2 billion industry in 2010 to $113.6 billion by 2020.

© 2012, Richard Matthews. All rights reserved.

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Cleantech Partnerships and Collaborations

In cleantech as with most sectors, partnerships and collaborations are vital to drive innovation and move forward. This is particularly true during difficult economic times. This was certainly the case in 2011 and all indications are that it will be even more of an important trend in 2012.

As reported by Ernst & Young, key players in the electric vehicles (EV) space are collaborating to expand the accessibility and capabilities of EVs. Coulomb Technologies is allowing Dutch navigation systems firm TomTom to access their ChargePoint Network API to enable drivers to find the nearest available charging station and reserve it in advance. CODA Automotive is teaming up with Great Wall Motor Company to develop EVs, a collaboration that will involve integrating the Californian firm’s EV propulsion system with the vehicle platforms of Great Wall. In addition, Ford Motor and Toyota Motor are working jointly to develop a new hybrid drive-train system for light trucks and SUVs.

Here are some other collaborations in the EV sector:

The Crucial Role of Public Private Partnerships in US Battery Technology
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Ford and Toyota Collaborating on Hybrid Technology and Telematics
GM Collaborating with LG to Develop EVs
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GM and BMW are Collaborating on Hydrogen Fuel Cell Development

Companies in the biofuels sector are also forming a series of important alliances to help advance the field. Dow Chemical and Mitsui & Company are creating a joint venture to produce ethanol and biopolymers in Brazil. ZeaChem and US carmaker Chrysler are combining efforts to accelerate the development and adoption of cellulosic ethanol. General Electric (GE) is teaming up with Virgin Australia, Renewable Oils Corporation, Future Farm Industries CRC and Canadian biofuels firm Dynamotive Energy Systems to develop commercial biofuel for the aviation industry.

© 2012, Richard Matthews. All rights reserved.

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California and Other US Leaders in Cleantech Investments

California is well known for its green orientation and this is borne out in the data for 2011. As the world's eighth-largest economy California has unmatched potential. More than any other state, in California the economy and the environment go hand in hand. Despite challenges, California continues to set the pace for policy, practice and green economic opportunity. A green revolution is unfolding, and California has the public support, technology innovation and history of commitment to sustainability to remain at the leading edge of this revolution. Here is a breakdown of the numbers for the US states leading cleantech investment.

According to Ernst & Young, California continued to lead national cleantech investment in 2011 with the state raising US$2.8bn. In Q3 2011 alone, California garnered 52 percent of all dollars with $583.0 million, a 74 percent increase from Q3 2010.

Massachusetts raised the second-highest level of annual investments with US$465.1m. This was a 63 percent increase from last year, said Spencer. Colorado came third in 2011, with investments in the state reaching US$363.3m.

In Q3 both Pennsylvania and Oregon had investments more than triple since Q3 2010, bringing their Q3 2011 investment levels to $85.4 million and $73.5 million respectively.

© 2012, Richard Matthews. All rights reserved.

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Leading US Cleantech Investment Sectors in 2011 Q3 and Q4

Overall 2011 was a good year for cleantech investments but some sectors fared better than others. According to Ernst & Young in 2011 the Energy Storage segment led cleantech investment in Q3, while the solar sub-segment led in Q4.

The energy storage segment raised $421.0 million during Q3 2011, representing a 1,932 percent increase during the same period last year and has raised a total of $865.2 million throughout 2011. Fuel cells led this segment with $225.5 million, representing nearly 54 percent of the overall investment in the Energy Storage segment in Q3 2011. The Energy Storage segment had the top three transactions of the quarter, the largest of which was the $150.0 million raised by Bloom Energy.

Cleantech companies in the Energy/Electricity Generation segment raised the second largest amount in Q3 2011 with $255.1 million, a 2 percent decrease from Q3 2010. The Solar sub-segment led investments with $195.8 million, accounting for 77 percent of the sector’s total investment.

In Q3 2011, the Energy Efficiency segment ranked third with respect to total amount invested, with $245.1 million, a 23 percent increase from Q3 2010. The segment, however, led the quarter in rounds of financing with 21 deals, a 31 percent increase from 16 deals in Q3 2010. The largest transaction in this segment was completed by Bridgelux, a provider of light-emitting diode (LED) solutions, which raised $60.0 million.

Companies in the Industry Products and Services segment attracted $132.0 million, a 22 percent decrease from Q3 2010. The segment ranked third in the number of deals with 15 rounds of financing this quarter compared to 13 in Q3 2010. Additionally, biofuel deals continue to lead the Alternative Fuels segment. With $23.5 million raised, HCL CleanTech Ltd., a North Carolina-based company that converts cellulosic biomass into fermentable sugars, secured the top biofuel deal for Q3 2011.

The solar sub-segment received the largest share of cleantech capital in Q4 2011 with US$284.5m. This figure accounted for 91 percent of the sector's total investment of US$312.9m.

The industry products and services segment raised the second-largest amount in 2011, at $1.0bn, down 34 percent from 2010. In Q4 2011, the segment raised $256.2m. The largest deal was for the quarter was completed by Better Place, a Palo Alto, California-based provider of electric car networks, which raised US$201m.

The energy storage segment ranked third in terms of total amount invested in 2011, with US$932.6m invested. The batteries sub-segment led the sector in Q4. Companies in the energy-efficiency segment attracted $646.9m in 2011, a 29 percent decrease from 2010.

© 2012, Richard Matthews. All rights reserved.

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VC Investment in US Cleantech in 2011

Overall 2011 was a good year for cleantech in the US but the numbers indicate that there may be a cooling trend in investments for 2012. In 2011 we saw increased investment in green technology compared to 2010, but investment slowed in the fourth quarter.

Ernst & Young reports that US venture capital (VC) investment in cleantech companies increased by 73 percent to $1.1 billion in Q3 2011 compared to Q3 2010, while deals also increased by 36 percent to 76, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. On a consecutive quarter basis, dollars invested in Q3 2011 is 4 percent above the amount in Q2 2011.

These numbers led Jay Spencer, Ernst & Young LLP’s Americas Cleantech Director to say, “Confidence in cleantech investing continues despite the challenging investment market. We saw significant commitments in energy storage, which reflects a growing corporate focus on proactively managing their energy mix.”

However, Spencer said the 2011 VC investment represented a 29 percent increase from the US$3.8bn raised in 2009. But in Q4 2011, VC investment in clean tech reached US$940.5m with 70 rounds of financing, said Spencer. This was a decrease of 41pc compared to the US$1.6bn raised in Q4 2010.

"Clean tech is still in the early stages of a long-term journey," said Spencer. "We've reached a point where new products and services are ready to be launched, and as these products come to market, we're seeing renewed interest, innovation and opportunity in clean tech."

© 2012, Richard Matthews. All rights reserved.

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Top Green Stock Picks for 2012

The stock market has not performed well in 2011 and green stocks are no exception. If the US can maintain its current trajectory and Europe can avoid slipping into recession, 2012 may prove to be a better year for the alternative energy and cleantech sector. The overall environment was not the only drag on stocks in 2011, the Chinese flooded the market with cheap solar panels, bringing the price down and taking some solar companies with it.

Canaccord Genuity has its “Best Ideas” list for the CleanTech sector in 2012 and they are focused on companies which are adopting trends for technologies that optimize energy creation and consumption.

Some of their top picks for 2012 include Itron, Inc. (NASDAQ: ITRI) and Acuity Brands, Inc. (NYSE: AYI). Another one of their top picks is a Canadian company by the name of RuggedCom.

Itron, Inc. (NASDAQ: ITRI) was maintained as Buy: “…we remain decidedly contrarian as shares continue to trough, yet the multi-year Smart Grid product cycle continues to unfold through mid-decade. We favor the company’s strong market share and FCF generation capabilities (10%+ FCF yield), ongoing restructuring efforts, share buyback and active M&A program against current investor concerns about ’12 & ’13 EPS power and European exposure. We find recently reinstalled CEO LeRoy Nosbaum acting with an appropriate degree of urgency to catalyze value creation at the current share price.”

Acuity Brands, Inc. (NYSE: AYI) was maintained as Buy: “We believe that LEDs will help accelerate Acuity’s traditional sales over time while growing to become accretive to the business model. As such, we see the potential for $3.50 to $4.00 in earnings power per share in 2013/2014 as the secular trend starts to manifest. We remain aggressive buyers on pullbacks from the fits and starts in the non-residential construction markets, and we view 2012 as the right time to build a meaningful position in the shares.”

RuggedCom is a Canadian company which trades as “RCM” in Toronto and Canaccord Genuity noted, “We find management execution impressive, as RuggedCom continues to generate above-market growth with industry-leading profitability. The core industrial switch/router business continues on its growth trajectory, while the achievement of profitability within the wireless business is a notable milestone… we find risk/reward attractive here.”

For more information go to the Canaccord Genuity site.

© 2012, Richard Matthews. All rights reserved.

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Social Business at Blue Planet Life

Blue Planet Life is a dedicated social business meeting the social goal of lifting life standards of the poor by education and by addressing the world community with issues of humanity and nature to bind people of all directions for one issue: to secure life on planet earth for the future.

The rules of Blue Planet Life's social business are as follows:

• Blue Planet Life is driven by a social cause.


• Blue Planet Life offers social business participation certificates for investors.


• Blue Planet Life pays no dividends.


• Investors can get back the amount invested in the company.


• The structures and instruments are the same as in a PMB.


• Blue Planet Life sells services and becomes self sustaining.


• Blue Planet Life recovers full costs.


• Any profit (surplus) made stays in the business to finance the development and the


• social business to do more good for humanity and nature.


• they do it with joy!

Blue Planet Life recognizes the multi- dimensional nature of human beings. We need to recognize the real human being and his or her multi- faceted desires. In order to do that, Blue Planet Life is totally dedicated to solving social and environmental problems. Like other businesses, our employees create goods or services, and provide these to customers for a price consistent with its objective. But its underlying objective—and the criterion by which it should be evaluated—is to create social benefits for those whose lives it touches.

Blue Planet Life is not a charity, nor a NGO, NPO or a CSR concept. It is a business in every sense. It has to recover its full costs while achieving its social objective. Blue Planet Life pursues this goal by charging a price or fee for the products or services it creates. Such a project is self-sustaining and enjoys the potential for almost unlimited growth and expansion. And as the social business grows, so do the benefits it provides to society.

Like any business, Blue Planet Life cannot incur losses indefinitely. Profitability is important to a social business. But any profit it earns does not go to those who invest in it. Rather than being passed on to investors, the surplus generated by the social business is reinvested in the business. Ultimately, it is passed on to the target group of beneficiaries in such forms as lower prices, better service, and greater accessibility.

The business one creates with social business is self-sustaining. There is no need to pump in money every year. It is self-propelling, self-perpetuating, and self-expanding. Once it is set up, it continues to grow on its own. You get more social benefits for your money.

Investors in a social business get their money back. They can reinvest in the same or a different social business or any other business. This way, the same money can bring more benefits.

Blue Planet Life is social business. It has the power and ability to raise living standards and bring about a sustainable change in the behavior of the individual for the benefit of nature and humanity.

It is the nature of a social business not only to address such a social cause but to achieve the goals with the possibilities of a PMB, pay back investments and do it with joy and happiness.

Click here for more information. Click here to contact Blue Planet Life.

© 2011, Richard Matthews. All rights reserved.

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