Tuesday, May 29, 2007

GE to Double Cleantech Investments

Venture capital investments to reach $50M a year by 2008
GE plans to double its clean technology venture capital investments from $25 million this year to $50 million a year by 2008.
GE plans to make investments across the cleantech sector including solar, biofuels and batteries. In January GE led a $40 million investment round in A123Systems, a company developing lithium ion batteries for plug-in hybrid vehicles (See: Battery Maker Receives $40M Jolt). Previous investments also include Scottish wave power company Ocean Power Delivery (See: GE Backs Wave Power).
"Our goal is to invest as much as we can, provided that we can find opportunities at the right price," said Kevin Walsh, Managing Director and leader of the renewable energy group at GE Energy Financial Services.
Despite bubble warnings, venture capitalists still have an appetite for cleantech deals. During the first quarter this year, $237 million was invested in alternative energy deals in the U.S., according to Dow Jones VentureOne. One year ago that number was $53.8 million. Cleantech investments last year totaled $537.6 million in the U.S.
An advantage for GE, according to Mr. Walsh, is access to GE’s global research centers where researchers can help to look at new companies.
GE’s increased venture funding is part of a bigger plan announced today by GE Energy Financial Services to double the overall investments in renewable energy to $4 billion by 2010.
"First and foremost, it’s good business and it also happens to fit well with our ecomagination plan," Mr. Walsh said, referring to GE’s green initiative launched in 2005.
Several financial institutions have also jumped on the green train. Citigroup two weeks ago said it would spend $ 50 billion over the next 10 years to address global climate change. In March, Bank of America launched a ten year $20 billion green plan.
"I think that it’s great that other organizations are also interested in this space. The market is growing and there is room for plenty of other players," Mr. Walsh said.

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