By James Sbrolla

I’m excited to launch this new column on the EnvironmentJournal platform. After decades of twists and turns in the environmental market, it’s a prime time to put the spotlight on the value of the growing green economy in Canada. The intention is to provide expert financial perspectives about the current state of the clean technology (cleantech) industry and where emerging opportunities exist in the market.

There are three key sections: General Market Commentary, Hot Sector News, and Stocks to Watch. The General Market Commentary provides simple data points that are impacting the industry in general. The Hot Sector news covers one specific company within our sector which has had a recent announcement or achieved a major milestone. For the Stocks to Watch section, we are looking to the analysts, investment advisors, and any other industry stakeholders for assistance in tracking performance and for ideas on which companies to profile.

General Market Commentary

Over the past year there has been multiple interest rate rises. On January 25, 2023, the Bank of Canada once again increased interest rates by 25 basis points to 4.50%. It’s the first hike of the year, but it comes after seven consecutive rate hikes in 2022. This, combined with major fluctuations in currency valuations, the Russian invasion of Ukraine, and other factors, are impacting individual investors and institutional investors in the global economy.

Hot Sector News

Quebec-based  H2O Innovation Inc. has just announced its first Canadian “Blue Loan.” A blue loan is an innovative instrument whereby the funds raised are certified and tracked exclusively for projects that support the blue economy, a close relative of the green economy, with both involving strategies for environmental management and climate action.

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Founded in 2000 by entrepreneur Frédéric Dugré, H2O was inspired by the Walkerton water crisis, when seven people perished and hundreds were made ill after the town’s municipal water was contaminated. The company has had a steady growth over its 23-year history and now has revenue of over $200 million and a forecasted 2023 EBITDA (Earnings before interest, taxes, depreciation, and amortization) of 10%.

With over 1,000 employees and 14 offices and manufacturing facilities in five countries, the company has built a diversified revenue base. It’s a Canadian company with an international presence.

The inaugural blue loan is a milestone for both H2O and for National Bank of Canada. It was inspired by the Guidelines for Blue Finance developed by the International Finance Corporation in January 2022. The guidelines were developed to address blue finance as an emerging area in climate finance where funds are earmarked for investment in ocean-friendly projects and critical clean water resource protection. The blue loan will allow H2O to continue to evolve as a leader in water and wastewater technologies and services while attaining sustainability objectives, such as reducing global water stress and curbing carbon emissions.

H2O has many independent analysts covering the company, all with targets for the stock ranging from $3 to $3.75 and the consensus target is $3.50.  The current trading price is $2.64. There are approximately 90 million outstanding shares, giving the company a market capitalization of just over $230 million.

Naji Baydoun, director of equity research for power and infrastructure at iA Capital Markets, is one of the analysts covering H2O.

“Both public and private sector entities are increasingly using sustainable debt financings to help fund projects with positive ESG outcomes. Compared to a traditional loan, a blue loan is one where the invested capital is aimed at supporting investments that address water-specific issues,” explains Baydoun.

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“For HEO specifically, using this type of financing will elevate the company’s ESG profile/credentials by raising awareness and investing in water solutions, and provide a small interest rate advantage. Sustainable financings have so far proven to only provide a minor ~5-15 basis point advantage on interest rates over traditional debt funding options. By aligning their ESG metrics to corporate performance, HEO can also attract investors that are looking to invest in sustainability-focused companies.”

Baydoun points out that the sustainable debt market is still a very small portion of the overall global debt market, but that it should grow over time as more companies turn to these options and investments in cleantech accelerate.

Frederic Tremblay, vice president of equity research, diversified industries for Quebec from Desjardin Securities, also comments on H2O’s blue loan milestone.

“Blue loans are innovative, and increasingly sought-after, financing instruments that earmark funds for investments such as water and wastewater projects. Obtaining an inaugural blue loan is a significant milestone as it showcases the sustainability benefits of the H2O Innovation’s water-related solutions and provides the company with incremental financial flexibility to remain a global leader in its field,” says Tremblay.

There are currently strong drivers in the cleantech water infrastructure space providing opportunity for H2O.  World population growth continues and is expected to reach 8.5 billion by 2030. Infrastructure is aging, with global estimates indicating that an investment of $6.7 trillion is needed by 2030. More than four billion people are experiencing water scarcity. Plus, water positive pledges have been made in many countries, coupled with increasing regulations to tackle contaminants of concern.

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Watch for H2O’s quarterly results, which will be announced on February 14th.  Since that’s Valentines Day, perhaps the market will love what they see. There will likely be updates to the targets once the results are provided to the market.

 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.

Name Symbol Price in $CDN
(Feb. 13, 2023)
Algonquin Power & Utilities Corp. AQN $9.91
Anaergia Inc. ANRG $4.96
Ballard Power Systems Inc. BLDP $8.13
*Biorem Inc. BRM $1.03
Boralex Inc. BLX $36.43
*CHAR Technologies Limited YES $0.45
Electrovaya Inc. EFL $1.28
Engine No 1 Carbon Streaming ETF NETZ $66.49
Evogene Ltd. EVGN $1.15
Greenlane Renewables Inc. GRN $0.46
H2O Innovation Inc. HEO $2.64
Loop Energy LPEN $1.05
*Thermal Energy International Inc. TMG $0.11
TransAlta Renewables Inc. RNW $12.00
UGE International Ltd. UGE $1.58
Westport Fuel Systems Inc. WPRT $1.44
Zinc8 Energy Solutions Inc. ZAIR $0.19

*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 EnvironmentJournal Advisory Board.

To pitch an idea for an upcoming Market Watch column, or to suggest a stock, please contact EnvironmentJournal Editor Connie Vitello at


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