New age venture financing in renewable energy: Hydroelectric Renewable energy venture financing home

New age venture financing in renewable energy:


Energy produced by hydro (and wind) power will double by 2030, according to The Economist. This comprises most of the growth in renewable sources' prominence in the planet's electricity utilization. The International Energy Agency assessed hydro sources as representing a leading 2.2 percent of truly "new" renewables used in 2007. However, this transition has difficulties in that public perception is commonly in disfavor of dams' construction, lasting an average of about 13 years. Reasons often cited are flooding and potential harm to water quality and marine life. Taking this sector's climate into consideration, following are the basics for new hydroelectric ventures seeking financing.

Current strategy to follow

The basics

As water volume increases, the amount of potential energy does as well. This means that if your operation isn't comfortably positioned on at least one large river, you have little chances of acquiring funding. Liquidity is of prime importance in a market slump, and with projects typically taking more than a decade to complete, your firm isn't likely to gain headway in pitches unless you've made significant progress in a large-scale project or currently own the assets necessary for the undertaking.

This means that to counter such obstacles, your firm should already be established. Diversification into not only other hydroelectric activities, but other sectors entirely is highly advisable. If you're able to achieve economies of scale in a project's current development through you self-financing your assets and legally managing to classify workers as independent contractors, external funding is more probable.

So diversification and essentially gaining establishment of being ‘privately owned’ are the critical factors here. An existing project’s headway and bottom-line efficiency is favored over innovation - unless your IP shaves years off of projects.

Up-to-date strategies in:

  • Valuable cues:

  • Other tips and tricks

    Small- to mid-cap mutual funds and ETFs are your most consistently safe bet for financing. Since they tend to emphasize geographic diversification, target many in all parts of the country. Also try Canadian portfolios of similar investment philosophy and stature. It's also advisable to harness any subsidy available if your operations are underway or plans are entirely drafted.

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  • Copyright Alex Stehr, 2008. — ContactHome