General Market Commentary

On March 28, Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released the historic Budget 2023—A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future. By all accounts, Budget 2023 offers an unprecedented range of new funds and investment opportunities to support the cleantech market, including the Canada Growth Fund—a new $15 billion arm’s-length, public investment vehicle—that will help attract private capital to build Canada’s clean economy.

Other financial credits include:

  • Clean Technology Investment Tax Credit: A refundable 30% tax credit on capital cost of investments made by taxable entities in wind, solar PV and energy-storage technologies.
  • Clean Electricity Investment Tax Credit: A newly announced, refundable 15% tax credit on the capital costs of investments made by non-taxable entities, such as Indigenous communities, municipally owned utilities and Crown corporations that make investments in renewable energy, energy storage and inter-provincial transmission and other non-emitting electricity infrastructure.
  • Clean Manufacturing Investment Tax Credit: A new 30% refundable ITC for investment in machinery and equipment used to manufacture clean technology and extract relevant critical minerals. This tax credit is available for the manufacturing of renewable energy and energy-storage equipment, and the recycling of critical minerals.
  • Clean Hydrogen Investment Tax Credit: A refundable 40% investment tax credit on green hydrogen, starting in Budget 2023.
  • Net-zero Transmission Project Support: There will be an upcoming consultation on the “best means” to support intra-provincial transmission that support Canada’s net-zero grid objectives.
  • Canadian Infrastructure Bank: $20 billion in support for Clean Electricity investments, including at least $10 billion through the Clean Power priority area and at least $10 billion through the Green Infrastructure priority area.
  • Recapitalization of SREPs: The Smart Renewables and Electrification Pathways (SREPs) program will receive a total of $3 billion to support regional priorities and Indigenous-led projects.

There are still some question marks around the details and the dates of tax credit availability, but the future looks clean and bright.

On April 12th, the Bank of Canada maintained the base interest rate of 4.5%, and many are predicting it will remain unchanged until the end of the year. The multiple increases over the past year combined with major fluctuations in currency valuations, the ongoing Russian invasion of Ukraine, and other factors, are impacting individual investors and institutional investors in the global economy.

However, the green economy is looking up thanks to the historic investments made in Budget 2023.

Hot Sector News

One of the companies that intends on taking advantage of new cleantech credits is UGE International Ltd. (TSXV: UGE), a Toronto-based company that has built its business around “bringing affordable clean energy to people and businesses around the world”.  Since 2008, the company has worked to develop, own and operate community and commercial solar generation and storage projects. It’s a capital-intensive business and UGE recently announced new financing.

UGE closed a brokered private placement of green bonds for aggregate gross proceeds of $1,423,545.00. The offering comprised a brokered best efforts private placement led by Canaccord Genuity Corp., on behalf of a syndicate of agents including iA Private Wealth Inc. and Raymond James Ltd., in accordance with the terms and conditions of an agency agreement entered into on March 30, 2023, by the company and the agents, for gross proceeds of $604,095 and a concurrent issuer-direct offering for aggregate proceeds of US$607,000.

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The aggregate gross proceeds in Canadian funds were calculated based on an exchange rate of $1.35 for every U.S. dollar raised in the offering. A second tranche is expected to close by the end of April 2023.

The “Green Bond” is a relatively new invention that has gained some traction over the past year.  As UGE builds sustainable projects the concept of the green bond fits well with the narrative that they used in communicating their story to the street.

According to the World Bank, green bonds are financial instruments that finance green projects and provide investors with regular or fixed income payments. Over the last 15 years, green bonds have become and important tool to address the impacts of climate change and related challenges.  A substantial amount of financing is needed to address these challenges. It’s critical to connect environmental projects with capital markets and investors and channel capital towards sustainable development — and green bonds are a way to make that connection.

The green bond market is the largest and one of the fastest growing segments of the sustainable financing market. Companies across North America and globally are increasingly turning towards these debt instruments as a means to secure funding for projects that met certain ESG criteria. For green bonds, this is typically relates to the selection and evaluation of projects that fund environmental or climate projects, usually clean energy.

“Our vision is to create a large and growing portfolio of solar and energy storage projects that provide our shareholders with strong returns and energy users with cheaper, cleaner energy,” says UGE CEO Nick Blitterswyk. “With over 300MW of project backlog, and a pipeline in excess of 2GW, we have a prime position to lead the clean energy transition.”

UGE recently announced that it closed project financing which included US$12.5 million of construction-to-term debt at 5.79% and US$7.1 million in tax equity to finance three Maine projects. The company has been active in recent months, announcing Notice to Proceed (NTP) on 10.0MW of projects and Commercial Operation (COD) on 1.4MW of projects in the first quarter. On April 5, 2023, UGE confirmed that the company’s backlog had grown to 313MW.

“In recent years, we laid the foundation for long-term growth by scaling our team and project backlog,” explains Blitterswyk. “In 2023, we are starting to realize what we set out to accomplish as the portfolio begins to scale rapidly.”

Nick Blitterswyk - CEO & Founder at UGE International | The Org

UGE International CEO Nick Blitterswyk.(Image credit: UGE.)

H.C. Wainwright & Co. in New York is one of the American financial firms tracking UGE. According to analysts at H.C. Wainwright, there are some key factors that look promising for UGE.

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According to financial analysts Sameer Joshi and Amit Dayal, UGE management is well positioned to take advantage of the rise in demand that expected from the U.S. Inflation Reduction Act (IRA). In addition to establishing an investment tax credit (ITC) of 30 per cent for 10 years, the IRA allows expenses for utility interconnection, which were thus far not allowed to be part of the ITC calculation, to be included. Additional upside resulting from the IRA, which they believe helps UGE in particular because of its focus on community solar, comes from incentives afforded to communities that are: dependent on fossil-fuels, low-income; or Native American. As a result of the IRA, some of the projects in the company’s backlog could be eligible to 40 per cent or more in credits. Joshi and Dayal believe that this should increase the value of the company’s portfolio that has been valued by potential customers at $2.00-2.60/W to $3.00/W or more.

Today the TSX trading price of UGE is $1.34.

Naji Baydoun is a financial analyst and director of equity research with iA Capital Markets in Montreal, Quebec. How does he see UGE leveraging green investment opportunities in the Canadian market?

According to Baydoun, the prevalence of green bonds relative to other forms of sustainable debt financings has made them a more liquid and easier-to-access instrument for the cleantech industry and UGE.

“UGE and companies in the cleantech space can utilize green bonds as a financing tool to support their growth while simultaneously providing investors in these bonds a healthy rate of return and positive environmental impacts,” says Baydoun.

Baydoun explains that there have been cases where the cost of capital of green financing has provided an advantage over the cost of capital from traditional bonds, but this has been mostly because of a relatively small delta, and that it is more true for larger issuers and companies that have an established track record and existing and developed debt platform.

As more and more companies turn to these debt financing options, says Baydoun, the market should grow more rapidly and some standardization could follow, which would facilitate access to investors and companies alike for green bond financings and improve their trading liquidity. UGE has been utilizing green bonds as a way to bridge their funding gap until the company reaches profitability. The company is currently undergoing a strategic transformation that was started in 2020, pivoting towards an owner and operator model of clean power projects in the U.S. This transition will help the company by providing more stable, recurring, and high margin revenues, but it needs to be funded with upfront capital, adds Baydoun.

“Since equity markets have been volatile of late, UGE has leaned on green bond financings to help it develop and deploy solar and storage projects; 2023 will be a big test year for the ramp up in pace of project delivery, and UGE has been finding investors to help it finance this growth via green bond issuances, something other companies may not have access to or at different terms if they were not in the cleantech space,” he adds.

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In terms of financial forecast, debt financing — green or otherwise — are a short term drag on financial performance because of the interest expense.

“Depending on how quickly UGE can put projects in the ground, the company could be on a path to reaching profitability and becoming self-sustaining within the next two years. I’m not expecting any fireworks at the next quarter specifically, but the focus is squarely on commissioning new assets as quickly as possible to reduce reliance on external funding,” says Baydoun. “In the meantime, by aligning corporate performance to ESG criteria via the use of green bonds, UGE should be able to attract investors who want to invest in smaller or less established but fast-growing companies focused on sustainability and environmental or climate impacts.”

The UGE team has expanded since its inception in 2008, bringing clean energy solutions to communities and businesses around the world. (Image credit: UGE.)

Stocks to Watch

Here is a list of Canadian cleantech stocks we’ve selected to kick off the column. This list of public companies is by no means complete, and we are open to suggestions from our advisors and readers.


Company Name Symbol Price in $CDN
(March 13/23)
Price in $CDN
(April 13/23)
% Change
Algonquin Power & Utilities Corp. AQN $10.38 $11.66  +12.33%
Anaergia Inc. ANRG $3.69 $1.78 -51.76%
Ballard Power Systems Inc. BLDP $7.32 $6.82 -6.83%
*Biorem Inc. BRM $1.05 $1.06 +0.95%
Boralex Inc. BLX $37.28 $42.19 +13.17%
*CHAR Technologies Limited YES $0.56 $0.66 +17.85%
Electrovaya Inc. EFL $1.08 $1.03 -4.63%
Engine No 1 Carbon Streaming ETF NETZ $65.18 $65.28 +0.15%
Evogene Ltd. EVGN $1.08 $0.81 -25%
Greenlane Renewables Inc. GRN $0.38 $0.30 -21.05%
H2O Innovation Inc. HEO $2.71 $2.60 -4.05%
Loop Energy LPEN $1.14 $0.85 -25.43%
*Thermal Energy International Inc. TMG $0.10 $0.085 -15%
TransAlta Renewables Inc. RNW $11.75 $12.57 +6.97%
UGE International Ltd. UGE $1.36 $1.34 -1.47%
Westport Fuel Systems Inc. WPRT $1.56 $1.11 +28.85%
Zinc8 Energy Solutions Inc. ZAIR $0.16 $0.15 -6.25%

*The author of this column owns equity. It is not meant to be an endorsement, but simply a statement of this fact.

Profile photo of James Sbrolla,

James Sbrolla is a veteran of the financial and environmental industries. His career has been focused primarily on public and private companies in the clean technology sector. He is a member of the Environment Journal Advisory Board.

This column is written by James Sbrolla and Connie Vitello, editor of Environment Journal. To pitch an idea for an upcoming Market Watch column, or to suggest a stock, please email


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