Chinese and Japanese investors will be the force driving merger and acquisition activities in the renewable energy industry in coming years, according to accounting firm KPMG.
Asian investment in the renewable energy industry in 2011 increased by more than 50 per cent from the year before. Asian companies made 29 acquisitions last year worth $US2.1 billion.
Survey respondents believe Chinese and Japanese buyers are likely to be the new major investors and acquirers in the renewable industry in the next 18 months. Mathew Herring, KPMG Australia’s national leader of renewables, has urged the country to position itself to take advantage of the coming investment boom.
“Given our proximity to - and strength of relationships with - these countries, we should be making Australia a more attractive place for renewable energy investment by continuing to progress policies, addressing infrastructure challenges, collaborating better with the resource sector and motivating domestic investors,” Mr Herring said.
Japanese trading houses and industrial corporations such as Marubeni and Mitsubishi have been active in acquiring overseas renewable energy assets in the past year.
Mitsubishi, one of Japan’s largest industrial conglomerates, announced a plan in March this year to acquire German North Sea offshore wind transmission assets for $US318 million. The company has also bought assets in Mexico and Britain.
Japanese interest in the renewable energy industry is largely driven by the desire to buy energy projects that offer long-term and low-risk returns. Hiroshi Sakuma, a senior vice-president of Mitsubishi, said: ”We are primarily interested in power projects. We continue to invest in the power business and infrastructure projects as they provide steady revenue for our company.”
Chinese investment in the industry is motivated by equipment manufacturers seeking to expand into new markets. Andy Cox, KPMG’s global head of energy and natural resources, said in the report that ”Chinese outbound investment seems very much centred on their OEM [original equipment manufacturing] players deploying their highly competitive technology into new markets”.
In March, China’s LDK Solar bought a 33 per cent interest in the German maker of solar photovoltaic components.
China Datang Renewable Power Co and solar equipment maker Baoding Tianwei Baobian Electric Co formed a partnership with Sydney-based CBD Energy last year to develop $3 billion worth of wind and solar plants.
