With improving costs, favourable incentives and pressure to meet renewable energy targets could drive investment of £325 million in the UK cleantech sector next year by venture capital funds and private equity houses.
Analysis of the Californian cleantech sector has shown that for every £64m invested in the industry, 2700 jobs are created. Applying this model to the UK the sector can expect direct and indirect job growth in the region of 13,000 in 2011, Kinsey Allen International predicts.
Although it is worth mentioning that California and the UK are very different in terms of rules and regulations.
M&A activity around cleantech innovation and interest in company flotations will play an important role in maintaining the levels of investment activity. The increase in investment means there will be future opportunities for investment banks to win capital markets mandates, as successful companies will need more funding, make acquisitions or go public, the firm predicts.
Zoe Bennett, head of Kinsey Allen Cleantech, says: “The cleantech sector is forging ahead in size and strength. More and more investors are piling in as businesses and industries grow confident of the returns available from green business. This growth will not only have a positive impact on the environment, it will also boost the number of jobs in the sector. Not only will larger sums of money pumped into cleantech companies and projects mean more jobs on the technical side but demand for talented business focussed individuals will increase further to ensure these investments pay.”