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Global clean energy investment in the first quarter of this year was lower than in any quarter for the past four years, according to the latest figures from Bloomberg New Energy Finance (BNEF).

The first-quarter investment figure for renewable energy, energy efficiency and energy-smart technologies was $40.6 billion, down 22% from the equivalent period of 2012 and 38% on the final quarter of last year.

BNEF says the decline reflected the effects of policy uncertainty in key clean energy markets such as the U.S. and Germany, a lull in financings in some relatively buoyant markets such as China and Brazil, and the effect on dollar investment levels from the recent, sharp declines in technology costs, particularly those of solar photovoltaic (PV) panels.

“The last 18 months have seen a number of significant support programs launched in the aftermath of the financial crisis come to an end,” explains Michael Liebreich, chief executive of BNEF. “The plummeting cost of clean energy technology has kept activity high in terms of [megawatts] of capacity, but not so much in dollar terms.

“For investment in clean energy to play its role in stemming the growth in world emissions, we would need to see investment levels at least double by 2020, rather than fall,” Liebreich continues. “Having said that, as always, there are some regions and technologies doing well. And previous history has shown that the first quarter of the year is generally the weakest, as banks and investors recover their breath from a rush of year-end deal-closing.”

Some key details of the first-quarter 2013 data include a 54% year-over-year fall in U.S. clean energy investment to $4.5 billion, a 15% setback in the Chinese total to $8.8 billion and a 25% drop for Europe to $13.4 billion, according to BNEF. The rest of Asia, outside of India and China, bucked the trend with a 47% jump to a record $10.1 billion, led by a surge of investment in Japan to $8.2 billion, the report adds.

Among different types of investment, BNEF says the largest decline was in the asset finance of utility-scale projects such as wind farms and solar parks - this fell 34% to $19.3 billion.

Policy uncertainty played a part in limiting asset finance in the early months of this year - in particular, BNEF notes, wind farm investment halted in the U.S. during the winter because the production tax credit (PTC) appeared to be heading for expiration at the end of 2012. Ultimately, the PTC was extended, but the uncertainty about its status had already front-loaded financings and construction of U.S. wind into calendar years 2011 and 2012. BNEF says it expects relatively little new wind project construction this year.

According to the report, the largest deal of the first quarter was the $1.9 billion financing of the 288 MW Butendiek offshore wind farm in German waters, but there was a big gap to the next largest - the $390 million financing of a 234 MW Gas Natural Fenosa onshore wind farm in Mexico and the $345 million investment decision for a 70 MW Kyocera solar PV plant in Japan.

The brightest signs in the first-quarter data relate to investment raised in the public markets, or stock exchanges. BNEF says this has been very depressed in recent years, in the face of an 80% decline in sector share prices to a low in late July 2012. Since then, however, there has been a rally of around 30% in the WilderHill New Energy Global Innovation Index, which tracks the performance of 96 clean energy stocks worldwide.

The report adds that the slightly improved picture on share valuations helped to stimulate a rebound of 89% in public markets investment in clean energy companies, to $1.7 billion in the first quarter. The largest deal was the $394 million initial public offering in London of Greencoat UK Wind, a fund investing in operating wind projects, including an unprecedented investment of $76 million by the U.K. government’s Department for Business, Innovation and Skills.

Venture capital and private equity investment in clean energy was $1.3 billion in the first quarter of this year, down 29% from the same quarter in 2012. Among the largest such deals between January and March were $308 million of private equity expansion capital for National Electric Vehicle Sweden and $125 million of expansion capital for U.S. solar installer Sungevity.

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