As the mortgage crisis pummeled the financial sector in the US resulting in a global meltdown, banks are now turning to what appears to be their own form of an attempted bailout. Deutsche Bank AG has announced that it will transfer its European technology-coverage team into a new, broader renewable energy unit.
The new renewable team, led by Charles Bryant as the Global Head of Renewable Energy, will focus on the previous technology group’s clients in addition to other companies across the renewable energy sector.
However, as featured on Alternative Energy Africa last week (Financial Meltdown Deals Blow to RE Investment), an analyst at the International Energy Agency (IEA) said renewable energy investment was poised to decrease substantially as energy markets – including the oil and gas sector – continued on a downturn. Chief Economist and Head of the Economic Analysis Division for the IEA Fatih Birol told Reuters that the lack of investment will have adverse affects on the industry as companies continue to struggle to obtain capital, lenders have tightened credit lines, and customers are buying less.
Although it is no secret that banks worldwide have tightened their lending standards which does pose a threat to investors seeking a line of credit. Yet at the same time, there will have to be a compromise in order for banks to regain footing as higher standards will eventually see prospective clients dwindle and therefore cause an adverse effect on bank revenue gained from loan interest. Creating a division for renewable energy is a great idea, but only if there are companies that can afford the increased interest rates and other fees that banks are now incorporating in an attempt to regain some of its loss.