CIC Going Green?

Ashby Monk

When I said a few weeks ago that SWFs should be investing in clean tech, I was thinking more of commodity-based SWFs. At the time, my rationale was as follows:

“Since sponsors of such funds typically rely on resources that will lose-out if the cleantech revolution succeeds, these investments would offer a very nice hedge over a long-term time horizon…getting in on the ground floor of clean tech would attenuate any loss of revenues associated with a technological advance that reduces our dependence on hydrocarbons.”

Well, I was right to suggest clean tech, but I was apparently wrong to leave out other types of SWFs.

The CIC has just invested over $700 million into GCL-Poly, which has 18 co-generation plants for steam and electricity, wind farms, an incineration plant, and is China’s largest polysilicon and solar wafer maker (after a large acquisition in June). The CIC will own 20% of the company and also have 49% ownership in a new joint venture to invest and develop photo-voltaic or other solar energy projects.

What’s up? Is the CIC following Norway’s lead and adding environmental investing to its remit? I don’t think so. For a company that has been spending most of its assets on commodities lately, it would only be natural to diversify into clean tech.

Still, as someone who has been to the coal mining region around Datong, I can say without reservation that it’s nice to see the CIC (and China) nurturing this new, clean technology (even if the fund’s motivation remains commercial).

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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