Market News

 February 20, 2012
GE and Carbon Trust launch $5m low carbon infrastructure fund

 The Carbon Trust has teamed up with GE to launch a $5m business incubation fund targeted at companies developing low carbon infrastructure technologies, such as smart grid applications or LED lighting.

The 18 month project will see the two companies provide investment for promising early stage European clean tech companies and offer management advice and capital to those with most potential.

"The opportunity that we see is that there is a lack of venture capital investment in Europe," he said. "And while the economic downturn is in place there's a lack of government stimulus support. But corporates are well placed to engage with these start-ups."

Acoording to a 2011 Bloomberg New Energy Finance (BNEF) report Europe is falling behind the US and Asia after finding its share of global clean energy investment has fallen from 42 per cent in 2007 to 25 per cent last year. Separate research by the Cleantech group similarly highlighted that just 19 per cent of clean tech venture capital deals in the last quarter of 2011 took place in Europe.

No limits have been set on the size of possible investments and The Carbon Trust offered no guidance on how many firms it was looking to back. However, GE and the Carbon Trust did say they are not soliciting applications for the fund, suggesting they will play a proactive role in identifying suitable investment candidates.

The funding forms part of GE's $200m EcoImagination Challenge, a programme launched in 2010 to find and fund the best clean tech concepts around the world.

The Carbon Trust's core funding from central government will cease in April and Vollbracht confirmed the organisation is now looking to extend the partnership with GE, and is "already in discussions" with other large companies to start similar investment programmes.

"The idea is this [$5m] is an initial phase," he said. "We'll have to see if this will prove successful."