Investing in Green is not easy as any investor in 2010 will tell you.The Green Indices and ETFs have taken a pounding in 2010 after a horrible 2008 and not so great 2009.The Green Indices have sharply underperformed the broad market due to a combination of several factors.These are High Competition in Solar Energy,Declining Demand in Wind Energy,Lack of Global Agreement on Climate Change and Slow Growth of Smart Grid Technologies.With developed governments facing pressure to cut fiscal deficits,green investments are also expected to get hit from government stimulus plans.However India and China are the two bright spots in an otherwise bleak Green Investing Landscape.Both countries have a Prodigious Energy Demand which is still growing at a rapid clip.Despite their reliance on Coal and other Fossil Fuel forms,both countries realize the need to promote Renewable Energy.While Chinese Green Companies are relatively well known,Indian Green Companies are a very small and nascent set.Green Investing India – Is it worth your Money examined the initial prospects concluding there were not many good candidates.However newer government policies and private participation has thrown up some good investment opportunities.Power Utilities with a Clean Energy Focus are the best green investment choices in India.Here are the reasons for investing in these Green Utilities
1) Government Policy mandating Increasing Percentage of Electricity to be generated from Renewable Energy
2) India’s Attractive Subsidy Scheme to Promote Solar Energy through the Jawaharlal Nehru National Solar Mission (JNNSM)
3) Large Power Demand from India’s fast Growing Economy.Most Parts of India are chronically Power Deficient with regular Blackouts of 8-10 Hours.
4) Growing Pollution and Global Warming Pressures to improve incentives for Green Energy
Prospective Companies to Invest In
India’s Green Utilities are still in the growing stage but hold good promise due to the above factors.While Big Power Utilities like Tata Power,Reliance Power,NTPC etc have plans of building Green Energy capacity as well,the interesting investment areas are pure play Green Utilities.The prospective Green Utilities are
2) Moser Baer Projects Private Ltd – This subsidiary of Moser Baer in which the Blackstone Group made a $300 million bet might prove to be a probably buy as well.Though it has plans of a 20:80 mix of Green and Dirty Power,the Blackstone angel makes it an intriguing play
3) Greenko – This company is listed in London AIM and has been making profits already.Like Orient Green Power it is building capacity in Wind,Hydro and Biomass mainly.