And pro-green. In 2007, OPIC committed to reduce greenhouse gas emissions from its projects by 20 percent over ten years and at the same time to invest significantly in renewable and energy-efficient projects. To do so, OPIC set an annual emissions limit for OPIC-supported projects. It also committed to explore emission reduction alternatives for all its projects, including opportunities to improve energy efficiency, and to apply new technologies for the capture, storage and recovery of GHGs. Jon Sohn, formerly of Friends of the Earth and the World Resources Institute, observed, “It’s a great story that the Obama Administration should let people know more about. OPIC is quietly going about its business, turning a healthy profit for U.S. taxpayers, leveraging private sector capital and mitigating climate change.”
Shortly thereafter, OPIC began a program of “helping to build global markets for American clean energy technology” that Ms. Soderberg recommended. OPIC established its Renewable Energy and Sustainable Energy Finance Group in 2008 to spearhead the agency’s efforts. This new focus yielded immediate results: In fiscal year 2009, OPIC committed nearly $188 million in financing to nine renewable energy projects, in markets as diverse as India, Liberia, Afghanistan, Poland, and Honduras.
The rapid growth of OPIC’s renewable energy portfolio is driven largely by the great investment potential which resides in the renewable energy and clean technology sectors. In 2000, energy technology represented just one half of one percent of all venture capital investments. Today, it's more than ten percent. According to Clean Edge, Inc., market opportunities for wind, biofuels, photovoltaics, and fuel cells are expected to increase fourfold in the coming years.
According to a recent report by the International Research Center for Energy and Economic Development, three global market drivers are intersecting to propel green investment in the developing world: high energy prices, accelerated technology shift, and increased environmental concerns. Government mandates for companies to adopt renewable energy in developing countries are an added boost.
These developments make the future of renewable energy investment an exciting one. Perhaps most encouraging has been the outsized impact that renewable energy projects can have. For example, last year, OPIC committed a $750,000 loan to a small business from Charlottesville, Virginia, Husk Power Systems, for the installation of 36 clean energy facilities which gasify rice husks left over from milling in rural villages throughout India. Each generation facility will serve a village of, on average, 600 households; that roughly translates into 110,000 people whose homes will be powered with clean energy via a small OPIC loan.
India, in fact, distills both the great need, and great opportunity, to develop new markets for American renewable energy technology. The country is known throughout the world as a powerhouse of an emerging market; less well-known is its leadership in encouraging investment in renewable energy to generate the very power it needs to realize its economic goals.
In part for this reason, OPIC last May held an international investment conference in New Delhi entitled Renewable Energy & Clean Technology: Access to Investment Opportunities in Emerging Markets. It was intended to facilitate new U.S. private sector investment in those sectors. More than 260 participants from 26 countries attended.
So OPIC has made a sizable first step on the road to increased American private sector investment in the renewable energy sectors of emerging markets. We look forward to doing much more of this good work in the coming years, expanding OPIC’s green portfolio to encompass renewable resources of all kinds such as water, fuel, fiber and food ‐ the entire range of goods and services that nature provides. This means financing new sources as well as innovations for the more efficient use of existing resources. It means helping the planet and its people to find ways to prosper together for generations to come.
Elizabeth Littlefield is the president and CEO of the Overseas Private Investment Corporation.