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Monday, January 25, 2010

Invest Well - Green initiatives boost infrastructure investment

Invest Well

Green initiatives boost infrastructure investment

RARE Infrastructure Limited, manager of the Renaissance Global Infrastructure Fund, seizes green investment opportunities in the U.S.

Despite the impact of the global recession, the U.S. is still going ahead with plans to tackle carbon dioxide and other greenhouse gas emissions head on, a policy that RARE, manager of the Renaissance Global Infrastructure Fund, believes creates investment opportunities.

Even California, more often in the headlines over the perilous state of its finances, remains committed to the energy efficiency programs that have kept its per capita energy consumption flat since the early 1970s. By 2020, 33% of all electricity consumed in California will have to come from renewable sources, a commitment that will require an estimated $115 million of infrastructure investment, according to industry participants. The vast bulk of this is likely to come from financial investors building wind and solar farms and signing long-term sales agreements with the utilities investing in electricity transmission lines.

One of the companies that RARE has recently invested in is Edison International. Edison’s main subsidiary is Southern California Edison (SCE), which estimates that some 80% of the new California transmission will be built in its service territory. This will allow SCE to grow its investment base rapidly over the next 11 years, and make regulated returns. RARE expects strong growth from SCE, driven by California’s green legislation.

Due to its stable defensive qualities and income-generating ability, infrastructure investments often appeal to today’s investors. Previously available only through institutional-style investments, this asset class can now be accessed by retail investors.

In addition to the Renaissance Global Infrastructure Fund, investors can also access infrastructure through the Renaissance Optimal Income Portfolio.

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