The Cleantech Group™, founders of the cleantech sector and providers of leading global market research and financial services for the cleantech ecosystem, along with Deloitte, which together with its affiliates provides audit, tax, consulting and financial advisory services to cleantech companies, today released preliminary 1Q09 results for clean technology venture investments in North America, Europe, China and India, totaling $1.0 billion across 82 companies.

The 1Q09 total is down 41 percent from the previous quarter, and down 48 percent from the same period a year ago. Cleantech venture investments have now declined for two consecutive quarters since peaking at $2.6 billion in 3Q08, representing the lowest level of venture capital investment in clean technology companies in two years. The average round size has contracted from $20 million in 3Q08 to $ 12.3 million in 1Q09.

“Cleantech financing is moving into a new phase, characterized by diversified funding sources, as the global recession and liquidity issues impact venture investors. Venture funds continue to invest significant sums, albeit at a slower pace and smaller scale than in the past two years,” said Brian Fan, Senior Director of Research, Cleantech Group.

Meanwhile, governments globally are allocating historic amounts of capital to clean technologies through stimulus packages, loan guarantees and tax incentives, which will enable the cleantech industry to continue to develop. A report titled ‘Towards a Global Green Recovery’ to be presented at the G20 Summit in London later this week estimates that almost $400 billion of some USD $2.6 trillion in economic stimulus allocations announced so far by G20 nations are earmarked for clean technologies such as renewable energy, improved electrical grids and cleaner cars.

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At the close of their summit meeting in London, the G-20 leaders committed to make available a $1.1 trillion program of support in addition to their national economic stimulus packages. While repairing the global financial system was the top priority, the closing communiqué stated  , "We agreed to make the best possible use of investment funded by fiscal stimulus programmes towards the goal of building a resilient, sustainable, and green recovery."

"We will make the transition towards clean, innovative, resource efficient, low carbon technologies and infrastructure. We encourage the MDBs [multilateral development banks] to contribute fully to the achievement of this objective," the communiqué added.

Also referenced was a reaffirmation of a commitment "to address the threat of irreversible climate change, based on the principle of common but differentiated responsibilities, and to reach agreement at the UN Climate Change conference in Copenhagen in December 2009."

Many observers took comfort in these statements. UN Secretary-General Ban Ki-moon said he was encouraged by recognition of the strong links between tackling the economic turmoil, food security and climate change. Yvo de Boer, the top United Nations climate official, noted "This is a good example of the major economies of the world coming together and developing a common understanding."

The absence of specific ’low carbon’ commitments in the summit communiqué does not mean the environment lost out in this round of talks, as some have suggested. In fact several initiatives were put in play to iron out environmental and climate change related proposals for the December Copenhagen conference, including another G-20 meeting in the fall. Until then, each G-20 member will pursue their own economic recovery programs, many of which contain measures targeting clean technologies and other projects with significant environmental impacts.

That being said, the question arises how green are these individual economic recovery packages. HSBC’s Global Research Division has published an informative report that answers that question directly. The Report, entitled A Climate for Recovery, examined more than 20 economic recovery plans and categorized the spending and tax-cutting measures according to the 18 investment themes in the HSBC Climate Change Index.

HSBC estimates that roughly 15% of the estimated $2.8 trillion of previously announced economic stimulus measures can be associated with investments consistent with stabilising and then cutting global emissions of greenhouse gases.

According to the report, on a percentage basis South Korea leads the group by allocating more than 80% of its fiscal stimulus spending to green initiatives.  But China tops the list in terms of the size of planned green spending ($200 billion). China has set aside 34% of its planned spending for eco-friendly projects. By contrast, India is investing nothing of its $13.7 billion stimulus plan for green ventures. Italy and Japan are the least green of the rich G7 countries, allocating just 1.3% and 2.6% respectively.

The United States and Canada rank 5th and 7th respectively on a percentage basis, though the estimated $94.1 billion allocated for green projects places the United States second behind China is total spending.

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Norway has announced plans to invest NOK 20 billion ($3.1 billion) of its government pension fund in clean technology over the next five years.

According to Norwegian Finance Minister Kristin Halvorsen, the fund will focus on investments “that can yield indisputable benefits,” including clean energy, carbon capture and storage, waste and pollution management and energy efficiency improvement.

Particular attention will be paid to projects promoting sustainable growth in emerging economies, said Halvorsen.

The plan also includes a climate-change study in relation to financial markets.

“In the same way as the Stern Review provided important knowledge about the impact of climate change on the general economic development globally, work of a similar nature might shed light on the effect on financial markets more specifically,” said Halvorsen.

The project is the latest in a series of changes to investment criteria for the $300 billion pension fund, which has stopped backing tobacco-producing companies and evaluates corporate governance and attitudes to environmental issues when weighing potential investments.

Even with turmoil on financial markets, venture-capital money is still flowing to new energy technology ventures.

• Intel Capital has invested in three Chinese clean-tech investments, according to published reports.

The venture-capital arm of the chip giant put $20 million into Trony Solar Holdings, a large solar and wind power developer in China, according to reports. They represent Intel Capital's first clean-tech investments in China.

Intel Capital invested in SpectraWatt, a solar company spun out of Intel earlier this year, and smart-grid firm GridNet. It set up a $500 million fund for clean-tech deals in China.

"We think innovation is the way to help companies out of this financial crisis," Cadol Cheung, head of Intel Capital in Asia Pacific told reporters on Tuesday. "We have no plan of slowing down our investment pace."

• Ice Energy has raised $33 million as part of a second round of financing. The funding, led by Energy Capital Partners, also includes up to $150 million in project development financing.

Ice Energy makes rooftop air conditioners that make ice as a way to lower the cost of operating them.

During off-peak hours, such as the middle of the night, machines freeze water. During the day, the ice cools refrigerant to run the air conditioner, cutting down on the electricity they would otherwise need.

The ice storage can shift the demand to off-peak times by as much as 40 percent, according to the company. For that reason, the company is marketing its products to utilities which are looking for ways to reduce peak demand to avoid construction of new power plants.

•  Blue Source said that Goldman Sachs will take an equity stake in the company and finance carbon offset projects.

Blue Source identifies and runs projects that reduce greenhouse gases, such as methane-capture at landfills and carbon capture and storage at oil wells.
Goldman Sachs will market and trade the carbon offsets from Blue Source projects in carbon emissions trading markets, according to the companies.

•  General Electric reports that it is investing $30 million in lithium-ion battery maker A123 Systems, part of a planned $102 million series E round.

GE is now the largest investor in the company with a nine percent stake after having put in $55 million. The two companies are working on different projects, including integrating A123 Systems' batteries in the Think all-electric town car and a hybrid bus platform.

Both GE and A123 Systems are pursuing the market for power grid storage as well.