Speakers:
-    AGF Private Equity: Nicolas Chaudron, in charge of Cleantech investments
-    Bryan and Garnier: Sébastien de Blégiers, Analyst
-    Gaz de France: (French Gas Company) Raoul Arvengas, in charge of
-    Capital-Development   
-    Schneider Electric: Ignace de Prest, Investment Partner
-    Xange Private Equity: Dominique Agrech, Member of the Executive Board

Coordinators:
- Jean Rognetta, journalist


Introduction:
With global warming, the problem of energy security and the consumption of developing countries, new business models are put in place. A good development model passes by the partnership with the industrialists.

Cleantech covers 5 major areas:
- Energy (aspects of production, storage, distribution)
- Sustainable Development (new green products, new services, new markets)
- Air
- Water
- The treatment of waste


1/ State of initiatives and financing:

Context:
Cleantech began arriving in the years 2002-2005 from new projects.
In 2005, cleantech investments took off in a panorama where the French were nearly nonexistent (particularly on renewable energy).
In the last quarter of 2007, the number of investors who were set to raise funds for cleantech had multiplied by 3.
Despite France being world leaders of energy and the environment, they have had an ambivalent role regarding renewable energy.

Investments in clean energy:
In 2007, of the 100 billion dollars invested (all areas of finance combined) on a global level:
- 6 billion was dedicated to young companies
- 12/3 of the investments concern renewable energy
-.2 billion dollars were invested in France
- 20 billion of the investments came from private equity funds


Capture the innovation:
The French technological choice on nuclear has caused a delay of SME (Small & Medium Enterprises). The cost of production is extremely competitive and it is an economically attractive solution.
For other solutions such as wind power or solar energy, the innovation can come from major research centers. But they cannot do everything. The SME (Small & Medium Enterprises) must also bring the innovation, such as the abundance that happened in Germany (with the “rate of redemption” that now exists in France).
Gaz de France (French Gas Company) for example, tests the innovation internally, validates it, and then assists it its development.

Massive Investments:
The energy challenge being critical, it is necessary to invest (hundreds of billions). The investment of private equity and of capital-risks cannot suffice. On the other hand, they can bring solutions which will lead to developing. Investing massively will bring down the cost of production. Money invested will attract the entrepreneurs.



2/ Methods of investments:

The constraints:
Compared to the US, there are not yet many investors who are interested in cleantech.
When investments are made by big business, negotiations are long and impede the development process.
For now, France lacks specialized human competence in the area of cleantech investments.
The technologies are there but are upstream, administrative problems are hindering the development.
It takes a strategy of funds in funds to approach start-ups.

Regarding investors:
The start-ups are capable of developing much faster and are a huge innovation reservoir.
We must:
- Detect the market trend and the innovation which might have an impact on the trades of large groups.
- Be in contact with these innovative companies
- Have creative objectives of value
- Set up partnerships with financed companies: technological or business partnerships.
Large groups finance companies to create an eco-system of innovation around these groups. These companies will be required to develop outside of the group. Therefore, this one creates a valuable partnership during the period when it is financed, and then it can resell these companies.

Regarding of young investors:
They must have contact with the decision makers of large groups:
- For the added value of strategic positioning
- For the reassurance that comes with having a large group of investors.

However, the cycle of investments in these companies stretches over several years (5 year partnership). The interlocutors of the partnership may change (problem of durability in a corporate venture).
In addition, it is difficult to go see the competitors at the time of the release (conflict of interest).



3/ A political will that generates a disparity between sectors:

The green bubble does in fact only concern some sectors.

Bio-fuels:
With the rise of raw agricultural materials and the end of subsidies, the bio-fuels sector is on the brink of bankruptcy. The German government has backed down in this sector.

Solar:
To survive, solar will have to find a new technological break to quickly become profitable without subsidies.
In Germany, the current desire to lower subsidies is intended to put pressure on the panel merchants to lower their prices.
Building a solar farm in France today is not profitable (except when the solar panels are integrated into the construction) and there is no introduction of solar energy companies on the stock exchange.

Biomass:
The regulatory and tariff contexts play a big part. For example, it has allowed biomass. It is still difficult to invest in these companies because they are struggling to provide clear business objectives and to take hold. We still have very little visibility.
Some biogas companies in developing countries can register in CDM (Clean Development Mechanism) but UN (United Nations) must decide whether the projects can or cannot be integrated in the program.
At the level of forest biomass, the environment tariff is not sufficient to foresee an important ROI (Return of Investment).


Conclusion:
The issues of energy consumption implicate the manufacturing, political, legal and social aspects.
In deciding to put subsidies in place, the State pushes to invest (no chain could exist without this first investment). In the future, it will have to make a political choice on which industries to support.