PATH FORWARD: Why PE is Uncertain about Energy Transition Investments

More capital is set to flow in energy transition initiatives as the oil and gas industry moves toward a low-carbon future, but there is some hesitancy among private equity investors, according to Ravi Purohit, partner with Latham & Watkins.

“You’ve got a lot of money chasing not a lot of opportunities,” Purohit told Hart Energy’s Faiza Rizvi. “The appetite is there and people want to invest but they are running into a supply-demand problem.”

Further, Purohit pointed to uncertainty among investors regarding tax credits associated with renewables and new low-carbon technologies. Private equity investors are looking for good management teams to back investments in the energy transition space. For example, investors are also looking at proven carbon management technologies since a lot of them are still in infancy.