Bill Gates-backed climate fund to invest $15 billion in clean tech

Breakthrough Energy Catalyst, a private-public fund backed by Microsoft Corp’s founder Bill Gates, is planning to invest up to $15 billion in cleantech projects across the United States, the United Kingdom, and the European Union.

The fund will invest in four key areas — direct air capture, green hydrogen, aviation fuel, and energy storage technologies, aiming to help countries reach net-zero emissions, Financial Times reported on Monday.

Although BEC, which is part of the Breakthrough Energy group, started by Gates in 2015, has raised over $1.5 billion in private capital from businesses and philanthropies, it plans to invest ten times that amount, using innovative financial structures and partnership agreements, Jonah Goldman, managing director of the fund, told FT.

“We are last-mile financing, and so, we will be the riskiest capital in there,” Goldman told FT. “We’re really trying to demonstrate which of the technological pathways are going to be most effective.”

Green premium

To fund large projects, BEC will provide three types of capital — philanthropic donations, sub-market equity investments, and product offtake agreements, that would not otherwise be financially viable, the report said.

Since the pandemic, there has been a significant jump in private and philanthropic investment in clean-tech, and BEC will focus on creating markets for green products and technologies that will bring down the production cost for materials like green steel and green hydrogen.

On its website, Breakthrough Energy describes BEC as a “program to demonstrate how we can finance, produce and buy the new solutions that will underpin a low carbon economy.”

The report said, one of the goals of BEC is to reduce the “green premium” for products.

The green premium is referred to the additional cost of choosing a clean product over the non-sustainable counterpart that emits a more significant amount of greenhouse gases.

Funding and support

Several governments are already supporting the fund, including the U.S. Department of Energy, Britain, and the EU, where BEC has a $1 billion partnership with the European Commission.

BEC announced in September that it had secured investments from Microsoft, BlackRock, General Motors, American Airlines, Boston Consulting Group, Bank of America, and ArcelorMittal.

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