CIBC investing team has green-energy focus

07/04/2010 at 5:42 pm Leave a comment

Bank to offer range of wholesale services including advice on project finance, IPOs and business loans

CIBC has become the first major Canadian bank to form an investment team focused on green energy and clean technology markets, forging a path that industry experts say is likely to be followed by its big-bank rivals.

Canada’s fifth-largest bank announced Tuesday that it has appointed Don Roberts, a former managing director and forestry analyst at CIBC World Markets Inc., as vice-chairman of the new wholesale banking team.

Roberts told the Star the decision sends a clear signal to the market and internally at the bank that renewable energy and clean technologies are more than a passing investment fad.

“We’re really looking at a structural change in the economy to low-carbon energy sources,” he said. “So this isn’t just to take advantage of a short cycle. This is a long-term move for us.”

The 10-person team plans to offer a range of wholesale services, including pre-IPO private placements, project financing, public equity issues and corporate loans. It will also advise on mergers and acquisitions.

Tom Rand, head of the clean technology practice at Toronto’s MaRS Discovery District, said CIBC’s plan to more aggressively pursue the market – including everything from solar and wind projects to water technologies to biochemical production – could send ripples through the sector.

“The big banks don’t like to put their foot out first, but they also like to move in lock-step,” said Rand. “CIBC, making the first move, will certainly force the other four to move.”

The big banks have dabbled, but as Roberts explained, most of the activity has taken place in “silos” and not as part of a coordinated plan. For this reason, Canada banks have been labelled laggards relative to their European peers.

The opportunities of getting into the game now are still enormous. Bloomberg New Energy Finance estimates that global expenditure on renewable energy projects alone will reach $150 billion (U.S.) in 2020, up from $90 billion in 2009. By 2030, the research firm predicts the market will reach $200 billion.

Progressive provincial policies in Canada, including Ontario’s Green Energy Act and feed-in-tariff program and B.C.’s carbon tax and forthcoming Clean Energy Act, are creating a long pipeline of renewable energy projects that will need billions of dollars in financing.

Meanwhile, venture investments are on the rise again after being hammered in 2009. Clean technology companies raised $1.9 billion during the first quarter of 2010, up 29 per cent from the previous quarter and 83 per cent from the same period a year ago, according to market research firm Cleantech Group.

Roberts said only $35 million in venture capital was raised by Canadian companies in the quarter. “It’s not great,” he said. “Clearly, in Canada, finance has been a problem. The whole financial community has to educate itself on this.”

Nicholas Parker, co-founder and executive chairman of the Cleantech Group, called CIBC’s new focus on the market “timely.”

He said there is no reason Toronto can’t become North America’s top centre for eco-financing, in the same way Canada’s largest city is the continent’s mining finance capital.

“This can be the thing that sparks it,” said Parker.

The Toronto Stock Exchange is getting ready.

The parent company of Canada’s senior stock exchange announced March 25 that it had partnered with credit-rating agency Standard & Poor’s to create a new clean technology index.

Source: http://www.thestar.com/business/bank/article/791303–cibc-investing-team-has-green-energy-focus

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Entry filed under: Green Finance, Solar, Wind.

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