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London 2012: Britain’s green investment opportunities - ASHARQ AL-AWSAT English Archive
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London Asharq Al-Awsat -The summer in Britain has been dominated by the Queen’s Diamond Jubilee and the London Olympics; and next week will see the start of the record breaking, sell-out Paralympics. These have been extraordinary successes. As this article pointed out two weeks ago these are outstanding examples of the creativity and innovation that are such an important part of Britain’ past and its future. It is also part of Britain’s major on-going programme for transformation and regeneration.

In parallel with the Olympics and Paralympics a new campaign and exhibition highlighting the best of modern British manufacturing is running. The exhibition called “Make it in Great Britain” is at the Science Museum and will run until 9 September 2012.

Britain has long been a leader in Green and Sustainable Infrastructure and Building innovation. The UK Green Building Council is one of a number of British organizations working for market transformation and we are playing an active role in providing innovative education and training for the construction and property sectors. UK-GBC held a series of Masterclasses focused on the sustainability lessons learned from the London 2012 construction project, following UK-GBC’s selection as one of the Olympic Delivery Authority’s Learning Legacy partners. In addition to infrastructure, Britain is also leading in low carbon and green housing.

British Expertise, the leading UK private sector organisation for British companies offering professional services internationally, regularly leads green building missions and seminars especially the Middle East. My colleague Geoff Maynard is chairman of the Operations Working Committee of Greener By Design, an organisation that brings together experts from every part of the aviation industry. Britain is very active in low-carbon innovations.

Britain is one of the world’s most open countries and actively encourages investment from the rest of the world. Investing in high-technology knowledge intensive British businesses will help gain leading edge knowledge that can help the rapidly diversifying economies of the Middle East.

Another attractive sector is wind power which is increasing annually at 20%, with a worldwide installed capacity of 238,000 megawatts (MW) at the end of 2011. Great Britain offers opportunities to be involved in renewables through investment opportunities for the Middle East while also encouraging people to live more environmentally friendly lives.

Munich Re, the world’s largest reinsurer, announced last week that it has acquired three wind parks in Britain as part of a 2.5-billion-euro ($3.0-billion) investment in renewable energies. The three wind parks represent a total capacity of 102 Megawatts and an investment of 300 million euros.

The reinsurer has already invested 600 million euros in renewable sources of energy in Europe since 2011. The business daily Handelsblatt reported in its Monday edition last week that Munich Re and fellow insurance giant Allianz were in talks about investing in offshore wind parks in the North Sea.

Renewable technologies such as Anaerobic Digestion and Biomass, which are not yet regarded as mainstream or mature markets in the UK will be central to creating new companies and products; these will provide great opportunities for investment in Research & Development.

Innovation and creativity are playing a big role in the renaissance of manufacturing in Great Britain, with many global companies locating their research and development centres in Britain. For example the Department of Aeronautical and Automotive Engineering at Loughborough University is one of very few that brings together the excitement and challenge of both aeronautical and automotive engineering.

To achieve global success Jaguar Land Rover is investing in Britain, in a future that will see JLR expand its product range and reach new customers in a truly global marketplace. New recruits have joined JLR over the last week that will now receive a year of training. Investing in the skills and training of people is vital for JLR to help develop Britain’s skills base generally. JLR is at the centre of Britain’s automotive industry’s drive to deliver technical innovation in all areas of vehicle development.

There are other major activities in the automotive industry in Britain. Designed in London developed in engineering labs in Cranfield and manufactured in Sunderland, there is British innovation and know-how in every Nisan QASHQAI. Late last year Nissan announced it will continue its commitment to strengthening the British economy, both directly and indirectly through the British supply chain.

There are also opportunities to invest in leading edge railway infrastructure here in Britain, the country that gave birth to the railways. The Victorian railway pioneers left us an impressive legacy that clearly demonstrates the power of transport. By leading the first rail revolution, our industries flourished, our exports multiplied, and our economy grew wealthy. Today the railways are as crucial to our current and future national well-being as they were to our past success.

The British Government has decided to develop a new national high speed rail network, the most significant transport infrastructure project in Britain since the building of the motorway system. The announcement by the government of guarantees for infrastructure projects was a bold move, designed to revive both the construction industry and the economy generally. It marks a clear turning point where the government’s positive rhetoric on infrastructure during the past few months has turned into action. Indeed the potential scope of the intervention goes beyond what the industry was expecting.

Globally infrastructure financing has been difficult for some time. The government has decided to intervene to get infrastructure projects started and the British construction industry moving. The sector employs some three million people across a huge supply chain and has a strong multiplier effect on the UK economy. Economists estimate that every £1 spent on construction generates almost £3 in economic activity. Infrastructure investing in principal can have some very attractive characteristics, such as an effective hedge against inflation over the long term. And as indicated above Britain’s is at the forefront of green and sustainable building.

Looking more long term, the government knows that with the fourth fastest growing population in Europe, it cannot ignore the growing demand for new and improved infrastructure any longer.

Britain is able to invest as a result of careful actions to address its deficit. Whilst Greece is near the top of the debt league and Portugal and Ireland have been moving up the table for the past few years, Britain’s relatively high level of debt to GDP ratio is not necessarily a problem as long as the institutions it is borrowing money from believe that it can pay them back. Clearly from sovereign bond yields this is the case with Britain.

With that note of realism in mind the government has made more land available for building and is investing in lower-cost homes. Housing Minister Grant Shapps said his plans would “get Britain building again. That’s why I’ve announced plans to release thousands of acres of public land for house building. And despite the need to tackle the deficit we inherited, this government is putting £4.5bn towards an affordable homes programme which is set to exceed our original expectations and deliver up to 170,000 new homes over the next four years.”

So given all these circumstances and the Middle East working on diversification and sustainable new investments this seems a sensible time to be looking to invest in Britain. This is so in the case of simple commercial investments and also to develop whole new knowledge based industrial capabilities. You could profit from Britain’s green investment opportunities and make use of them in other countries too.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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