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Asia Tech Coming Clean with Green Solutions

Tuesday, August 16th, 2011

According to the International Monetary Fund (IMF), the dynamic population of Asia will continue to grow during the next five years at rates double that of the United States and Europe. In parallel, however, is the equally dynamic growth of the Asia-Pacific region’s economy, which is expected to grow four times faster than that of Europe during the same time period. To support this rapid growth, Asian economies will have a tremendous increase in demand for energy – and most of this will come from clean and green energy solutions.

In a similar report from the IMF, Southeast Asia will have a 76 percent increase in energy demand during the next 20 years. Clean and environmental technologies will play a major role in supporting this demand in line with government green initiatives and increasing environmental clamor from their citizens. Despite pessimism from climate-change skeptics, Asia is indeed coming clean with green solutions.

Growing Interest in the Environment

China is already at the forefront of embracing clean tech, investing billions of dollars in renewable energy projects as part of its latest Five Year Plan. South Korea is also on a clean energy roll, increasing its renewable energy capacity by three times as much during 2009, and it is expected to do so again in the coming years. This is just the tip of the environmental iceberg as more and more Asian economies are embracing green concepts and most already have varying levels of development in the clean technology sector.

These developments are a clear indicator of growing and genuine Asian interest in the environment. Most industry experts agree, and according to Johanna Klein, an investment officer at the Asian Development Bank (ADB), this growing interest in clean tech in the Asian region is being spurred by three things: putting an end to environmental degradation, ensuring energy security for future generations, and generating new jobs with renewable energy and clean technology initiatives. The only hurdle for further development of clean technologies in Asia is the lack of public funds to support these initiatives. Currently, Asia accounts for US$100 billion of the total US$500 billion global clean tech market, according to the ADB. However, only 17 specialist funds amounting to US$1 billion dollars are being invested in clean technologies in the Asia-Pacific region. The region needs much, much more.

Investments in Asian Clean Tech

Between the years 2002 and 2005, there was very little investment poured into the Asian clean tech market. Investment activities only started to pick up in the the following years, but further growth was cut short in 2009 with the global financial crisis. Now, things are starting to get much better for the Asian clean tech market as investments are finally beginning to pour in.

One such investor looking at the opportunities presented by the Asian clean tech market is Aloe Private Equity, headed by Vivek Tandon, whose private equity fund has already invested in successful Asian projects such as the environmentallyfriendly production of multi-filament polyester-textured yarn at Polygenta in India. According to Tandon, his company is seeing a 22 to 26 percent return from their investments in Asian clean tech, which is bigger than the 8 to 9 percent ROI of its European counterparts.

Asian clean technologies are steadily surging ahead, either by adapting existing, more established technologies, or developing new and more innovative ones. One thing is for certain, and investors in Asian clean tech can attest to that – the future looks green for the Asian clean technology market.

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