Japanese Renewable Energy

Japan to Put Nearly $2 bn in CleanTech Fund

Written by Brian Hicks
Posted March 3, 2008

Sony's Blu-Ray DVD technology beat out Toshiba's HD-DVD recently, in a clash of Japanese tech titans. Will the next battle between Japanese technology firms be a green investing opportunity?

Japan is about to throw nearly $2 billion into an international fund that fuels clean energy technology in developing countries. With Japan's technological advantage in everything from hybrid cars to robots, it's safe to assume that Japanese companies will be among the world's leaders in CleanTech within a few years.

Japan, which currently holds the rotating chairmanship of the Group of Eight leading industrialized nations (G8), is planning to invest up to $1.93 billion in the fund, which has already drawn pledges of around $2 billion apiece from the United Kingdom and the United States.

Japan's financial daily Nikkei broke the story over the weekend, saying that exactly how much will come from Tokyo's deep pockets (Japan has one of the highest currency reserve totals in the world) won't be clear until an announcement during a major April summit of national financial policymakers and central bankers in Washington.

Kyoto-based Kyocera (NYSE:KYO) produces a wide range of electronic parts and equipment, including solar energy modules that are sold throughout the world. Kyocera reached highs of around $108 per New York-traded share in summer 2007, and the stock is now trading at about $83 with a dividend of 53 cents per share.

I will be shocked if Kyocera and other Japanese companies are not already in talks with Japan's finance ministry and Bank of Japan leaders to competitively place native knowledge and products in developing countries through the new international fund.

Think about it: billions will go into encouraging renewable energy use in places like Vietnam and Honduras, and the contracts for firms with winning technology will be humongous.

Not only initial installation, but also ongoing maintenance and customer loyalty are at play here, giving successful energy innovators a market for years to come. Heavy government subsidies are practically guaranteed, meaning Kyocera and others will be forced to eat very little of their R&D costs.

Of course, the kinds of projects we're talking about will also deliver major stimulus to Japanese CleanTech stocks, whether on Wall Street or the Tokyo exchange (where Kyocera trades under the ticker 6971).

Green Chip International is going to be there every step of the way.

Kind regards,

Sam Hopkins