RenewableS 2013 GlObal STaTUS RePORT - REN21

03 INVESTMENT FLOWS
Sidebar 5. Investment Types and Terminology
Investments in renewable energy are made by a range of public
and private entities and throughout the financing continuum,
from the birth of an idea or technology, to the construction
of renewable energy plants, to sale of the companies that
manufacture renewable energy equipment. Types and levels of
investment differ depending on the stage in the process:
1. Technology Research: Focused on the development of
new knowledge and potential products or ideas. Funding
comes from private and (primarily) public R&D funds looking
towards a long-term investment horizon with relatively
uncertain returns. The share of global new investment in
research in renewables technology in 2012 was about 4%.
2. Technology Development/Commercialisation: Promising
ideas or knowledge that emerge from R&D activities are
developed into commercially viable products, processes,
or services. Large corporations fund these development
activities in-house, whereas smaller entities usually must
raise external financing, typically from high-risk investors
seeking higher returns such as venture capitalists (VC)
and, to a limited extent, private equity investors. The share
of global new investment in technology development and
commercialisation in 2012 was almost 1%.
3. Manufacturing: Commercialised technology is produced
at scale through the mobilisation of assets and the establishment
of manufacturing facilities. Funding for this stage
is derived from private equity expansion capital and from
public equity markets (stock markets). The share of global
new investment in manufacturing in 2012 was over 2%.
4. Project (Roll-out): The most capital-intensive phase, during
which technology is installed and commercially operated
(requiring expenditure on land, permits, and licences,
as well as engineering, procurement, and construction).
Projects are either small-scale distributed capacity (