Description

Climatescope’s Clean Energy Investment & Climate Financing Parameter II encapsulates 14 data indicators. It accounts for the amount of clean energy investment a country attracts, the availability of local funds, the local cost of debt and green microfinance activity. Parameter II contributed 30% toward each nation’s overall score.

As discussed above, the Climatescope countries collectively had an exceptional year in generating new clean energy investment. In fact, the majority of new capital invested in zero-carbon energy projects worldwide in 2014 went toward non-OECD countries. Still, among the individual Climatescope nations there is substantial variation between those countries where investors are clearly active and interested and those where they are not. From 2010-14, one half the countries attracted $478bn in new capital for clean energy projects while the other saw just $1.5bn. This comparison is warped somewhat by the massive contributions of China which on its own attracted $303bn over that time. Still, the gap between the “haves” and “have nots” is wide; 10 nations on the list have between them seen virtually no investment in large-scale projects at all in five years.
Among the top five scorers, there were some rather intriguing results. Four of Climatescope’s smaller nations – Honduras, Bolivia, Nepal, and Guatemala (in that order) – attained the strongest scores, followed by the largest country, China, in fifth.

It is important to note that several key indicators used to calculate the Parameter II score are “levelized” against a country’s gross domestic product. That is, the methodology seeks to take into account and then discount the fact that some nations attract larger volumes of capital simply because they are bigger.

In 2014, Honduras benefited from a notably strong performance on the Growth Rate of Clean Energy Investments Indicator, which accounts for 22.5% of a country’s overall Parameter II score (and 6.75% of a country’s overall Climatescope score). Total clean energy capital deployed there in 2014 was $823m and has totalled over $1.4bn since the start of 2010. The country also registered sharp improvement on the Local Investments indicator.

As of the start of the second half of 2015, Honduras has the second most solar capacity installed of any country in Latin America, suggesting it is on track to fare well again in next year’s Climatescope. Foreign developers such as SunEdison and foreign financiers such as the Netherlands Development Finance Company and others have been active there, but local investment activity has been strong as well.

Bolivia has traditionally seen little zero-carbon energy investment but in 2014, the county fared quite well on Parameter II. In all, $40.6m was invested in 2014. While this is not a tremendous amount, it produced an exceptionally strong rate of growth compared to historic activity and Bolivia’s score was bolstered as a result.

For its part, China was far and away the worldwide leader in attracting new capital for clean energy capital for projects in 2014 and has attracted $304bn in such investment since the start of 2010. Even levelized against China’s massive $11tr GDP, this allowed the country to score in the top five on Parameter II. Taking into account all forms of clean energy investment, the country saw $89bn deployed in 2014 – a record for any country ever as tracked by Bloomberg New Energy Finance.