ABSTRACT
Investment is an indispensable element in the realization of any venture, ranging from large commercial enterprises to undertakings in the informal sector, such as the building of a rural house or hut; all such activities require the use of human resources, land, tools and raw materials. Smaller projects may require only the use of locally available resources made accessible to the project owner by legal rights or barter. Beyond the small local investments, capital becomes part of the project realization; this capital can come from national or foreign grants, loans or equity, or more typically a combination of these. This chapter focuses especially on investment and financing for sugar cane-based bioenergy, which in some respects is a sub-sector of biomass-based energy, but is also related to agricultural investment. Although sugar cane has a long history in some parts of Africa, investments on the energy side of sugar cane remain quite limited, but have received greater attention in recent years due to concerns over climate change, energy security and rural development. Sustainable investments are those that societal and environmental impacts into the financial calculus of the investor. This investment segment has grown to a non-negligible size during the last decade and has found many advocates within as well as outside the investment community, including academics, analysts, commercial investors, NGOs and fund trustees (Cerin and Dobers, 2008). Currently, the UN initiative for responsible investments, the Principles for Responsible Investments (PRI), established in 2006, has already gathered signatories with a total of US$19 trillion under asset management, involving some 210 asset owners and 437 investment managers. For investments in bioenergy to be sustainable, the allocated capital in the developed projects will need to respect socio-economic and environmental issues (FAO, 2008). The need for “informed” investments implies that investments
should be preceded by a systematic collection and analysis of the information required for a sustainable project design.
