Trump’s Imminent Threat to Green Energy Lies in the Greenback

As it turns out, denial of man-made climate change by the most powerful Earthling isn’t the biggest problem for renewable energy projects around the world right now.

A more pressing concern is the effect that Donald Trump is having on the US economy and financial markets.

So far at least, say investors in solar energy, there has been no significant pullback from projects initiated under the Obama administration’s Power Africa program that are part-financed by government agencies such as the Overseas Private Investment Corp. and the US Agency for International Development.

Christian Wray, Co-Founder and Chief Executive of JCM Power

“We don’t see any major or material impact to our projects as a result of the Trump administration,” Christian Wray, the co-Founder and CEO of JCM Power, said in OnFrontiers’ #ExpertChat online discussion this week. The Canadian company has developed over 70 renewable energy projects and is partnered with OPIC and USAID in on-going investments. “It seems as though when Trump spends 10 minutes thinking about an issue or talking to somebody about it, he often changes his stance.”

Export-Import Bank is a case in point. The President’s decision to nominate two former congressmen to key posts at Exim this week signaled an about-turn from Trump’s campaign message that he wanted to get rid of the institution.

“OPIC is a profit-making entity out of the US and so, even if he wants to shut down parts of the US government, it doesn’t seem like this would be the wisest move,” said Wray. “We’re watching things from here because, of course, we’re interested to know the fate of our partners, but we’re not seeing any major shift in terms of the willingness of foreign governments to engage in conversations and the execution of projects.”

Jake Cusack, Co-Founder and Managing Partner of Crossboundary

Power Africa, the $7 billion Obama initiative to double sub-Saharan electricity generation by 2030, is probably too far along the road now to halt, Jake Cusack, the co-Founder and Managing Partner of CrossBoundary, said in the #ExpertChat forum. The advisory firm recently created the first dedicated investment fund for commercial and industrial scale solar in Africa.

“To some extent, the die has been cast,” said Cusack. “There’s increasing momentum around clean energy, independent of particular policies and subsidies. We can see that reflected in the stock price of Tesla.”

Cost of money

Along with demand for electric cars, attitudes in corporate America remain supportive of sustainable energy, according to Cusack.

“Our major customers are multinationals, and we’re not seeing any changes to the sustainability goals that they want to hit, and the ways in which we can help them hit those goals in Africa,” said Cusack. “One of the exciting things in doing this work in Africa is that we’re not relying on any particular subsidy or tax incentive.”

So, everything looks rosy in the world of green energy?

Not quite. The biggest enemy of renewable projects in emerging markets right now could be the fallout from the success of the world’s biggest economy.

“As the US economy roars ahead, if the dollar gets more expensive, then it causes issues for us in certain regions where we’re linking our projects to US dollars,” said Wray at JCM Power.

Other problems may set in as US interest rates start picking up, lifting yields on Treasuries and bonds in the developed world.

“As Treasury yields are likely to continue to go up, that could make some of the yields in these markets and projects that have already been locked in, less attractive,” said Cusack at Crossboundary.”

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May 2 at 11:30am EST and 4:30pm BST

“Wall Street’s new global thinker,” as Barron’s front-page described him: Ruchir Sharma, Head of Emerging Markets & Chief Global Strategist at Morgan Stanley Investment Management

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