3.7 trillion war chest awaits those with right energy transition business model

Investment bank boss says “if you want commercial money you need a commercial proposition”

There is a ‘massive war chest’ of unspent investor money waiting to be unlocked by companies involved in the energy transition.

But those companies need to pay attention to their green business model as much as their sustainable credentials.

That was the message at International Energy Week in London from Amelia Pan, managing director of the Strategic Advisory Group at investment bank PJT Partners.

Speaking during a panel discussion on sustainable finance, Pan stressed that “2022 was a profoundly difficult year for the markets”.

However, she said there was a potential clean energy silver lining: “Private investors have 3.7 trillion of unspent dollars from 2022 – that’s a massive war chest.

“And the energy transition is one of the key areas for that capital.”

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She highlighted that ground-breaking projects often rise out of troubled times: “Remember, Google and Apple were both created during downturns.”

But she had some stark advice for companies seeking clean energy investment: “If you want commercial money you need a commercial proposition.

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“Don’t forget about the business model when you’re talking up our green credentials.

“People talk about their plans for the planet: what is less crisp is their business model.”

Before joining PJT, Pan was a partner at Brunswick Group where she founded its ESG practice and also hosted a podcast called the ESG Agenda.

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She was joined for the panel discussion by Aida Sitdikova, Director of Energy at the European Bank for Reconstruction and Development (EBRD), and she highlighted that the traditionally male-dominated energy sector is attracting more women as it embraces more clean technologies.

But she added that "it's a talent pool that must be leveraged".

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She also focused on why geopolitical events of the past year have made renewables an ever more attractive investment option: "You can't weaponise renewables. There's no energy trilemma with renewables."

Last week the EBRD revealed it was working with EIT InnoEnergy to develop an investment landscape for electric vehicle battery recycling, starting in Poland and potentially expanding to neighbouring countries in central Europe.

Last month it also announced that it had invested €170 million in support of Morocco’s green economy.