Cleantech Companies Attract More VC Funding, For Now…

According to Bloomberg New Energy Finance’s latest figures, combined, during the first quarter venture capital and private equity funds invested $2.9 billion in renewable energy companies, compared to $1.7 billion in the last quarter and $1.6 billion in the first quarter of 2009. Notable deals included — not surprisingly — an electric car transaction, the $350 million Series B round for US electric vehicle infrastructure firm Better Place and the $219 million raised by Brazilian wind developer Energimp.

Of concern though, is that the amount invested by venture funds remains far from the levels reached before the global financial meltdown. According to the National Venture Capital Association across all industry VC funds raised $3.6 billion, down 31 percent from the first quarter of 2009 — see chart below. If this trend continues, it means that cleantech companies, among others, will have a harder time finding capital. For the full year the NVCA expects VC funds to raise $15 billion, about half of what was raised in 2008.

China continues to be the other major story emerging from the various “quarter in review” now being circulated. The country attracted some $6.5 billion in new renewable energy investments last quarter. The Brussels-based Global Energy Wind Council (GEWC) even predicts that the country is slated to add more than 20 gigawatts of new wind capacity annually by 2014. By that time GEWC expects Asia will get 148.8 gigawatts of electricity from wind power plants compared to 136.5 gigawatts in Europe and 101.5 gigawatts of installed capacity in North America.

In North America first quarter clean energy investments grew to $3.5 billion from $2.4 billion in the previous quarter. Post financial crisis credit committees are stricter but are still approving some loans, in part motivated by the fact that some renewable energy projects are partially backed by government programs like the U.S. Treasury’s direct cash-grants. What will happen when that ends remains an open question. Investments in Europe slowed down to $4 billion during the first quarter, from $6 billion in the previous quarter and $7.6 billion during the first quarter in 2009.

Worldwide investment in clean energy totaled $27.3 billion in the first quarter of 2010, up from $20.8 billion during the same time period a year ago but significantly down compared to the $31.6 billion invested in the fourth quarter of 2009. Bloomberg New Energy Finance CEO Michael Liebreich maintains his bullish 2010 forecast predicting total new investment in clean energy will end up between $175 billion and $200 billion compared to $162 billion invested last year.

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