By Alex Morales

Jan. 28 (Bloomberg) — Wind and solar developers will benefit from $120 billion in stimulus spending on clean-energy generation worldwide over the next two years, Bloomberg New Energy Finance estimated.

Of $177 billion of recovery funds pledged by governments to renewable power and energy-efficiency measures, $25 billion was paid out in 2009 and $60 billion will follow in each of the next two years, the company said in a report released today at the World Economic Forum in Davos, Switzerland.

“The flow of ‘green stimulus’ cash is growing but the recovery of the capital markets means it will not be the only game in town,” Bloomberg New Energy Finance Chief Executive Officer Michael Liebreich said in an e-mail. “All in all, 2010 looks like being a year of moderation. Energy prices are high enough to allow steady investment in clean energy.”

Companies from Columbus, Ohio-based American Electric Power Co., the second-biggest U.S. electricity generator, to Spain’s Iberdrola SA, the largest operator of wind farms, are vying for stimulus money awarded by governments in Asia, Europe and Latin America.

Liebreich said in December that total investment this year in clean energy will likely by $200 billion, 38 percent more than the $145 billion spent in 2009. The challenge for lawmakers is to ensure they phase out stimulus spending without damaging the industry, New Energy Finance said today.

‘Urgent Question’

“One of most urgent question facing policy-makers in clean energy as elsewhere is how to stop the stimulus funding in due course without causing the industry to collapse,” the group said in the report.

The U.S. topped pledges for clean-energy recovery spending with $66.6 billion, followed by $46.9 billion in China, $16.4 billion in South Korea and $8.9 billion in Japan, Bloomberg New Energy Finance said.

European companies have benefitted from stimulus grants in the U.S., pocketing more than half of $550 million of awards made on Sept. 22. Iberdrola, Dusseldorf, Germany-based E.ON AG and Enel SpA, Italy’s largest electricity producer, were among companies receiving cash in the U.S.

Those promises helped total investment on clean-energy recover toward the end of 2009. Declines in the first quarter of last year pushed down spending 6 percent for the calendar year, Bloomberg New Energy Finance said.

“For much of the year it looked as though investment would be down by a much greater amount,” the group said. “In part, its healthy recovery was supported by the arrival of the first tranches of stimulus funding targeted at the sector around the world.”