green and sustainable business

Big bucks this month for renewable energy

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cleantech1More than $1.5 billion from two sources, one private and the other public, is going for renewable energy and clean technology projects.

The private venture capital firm Khosla Ventures said earlier this month that it closed on more than $1 billion in funding under two new venture funds with at least two-thirds of the money allocated for clean-tech investments, according to Samir Kaul, a general partner at the Menlo Park, CA firm.

On the same day the Department of Energy and the U.S. Treasury Department announced $503 million in government cash grants to 12 companies that are developing renewable energy projects.

Kholsa Ventures was founded in 2004 by Vinod Khosla, the founder and first CEO of Sun Microsystems. The firm offers venture assistance, strategic advice and capital for entrepreneurs working mainly in clean-tech areas such solar, battery, high efficiency engines, lighting, greener materials like cement, glass and bio-refineries for energy abd bioplastics, and other eco-friendly technologies.

In the two new venture funds announced early this month Khosla closed on a roughly $250 million Seed Fund designed to make investments of around $2 million each, Kaul says.

The firm also closed Khosla Ventures III at about $800 million, which will back companies with initial investments of $5 to $10 million.

This was Khosla’s first foray into raising funds from outside investors and the largest clean-tech funding by a single venture capital firm since 2007.

California Public Employees’ Retirement System (Calpers) was an investor along with other unidentified pension funds, university endowments and foundations.

Kaul estimated both funds will be invested over the next three to five years, adding that Khosla is looking into various sub-sectors of clean-tech with a special focus on building materials and bioplastics.

Those “are very big markets and they are growing and there’s a lot of consumer demand,” he said.

Current bioplastics investments by Khosla include Draths Corp. of Okemos, MI and Segetis Inc. of Golden Valley, MN. Its building materials portfolio includes two California companies, Soladigm of Santa Rosa and the cement company Calera Corp., of Los Gatos.

So far this year Khosla has added seven new portfolio companies in the clean technology sector. These include Skywatch Energy in solar, HCL CleanTech Ltd. in cellulosic sugars, Hybra-Drive Systems LLC in efficiency, and Rayspan Corp. and SeaMicro Inc. in information technology.

Stimulus grants awarded by DOE and Treasury are in the first round of about $3 billion in direct payments to companies in lieu of tax credits that will eventually support an estimated 5,000 biomass, solar, wind and other renewable energy production facilities.line “These grants will help America’s businesses launch clean energy projects, putting Americans back to work in good construction and manufacturing jobs,” said Energy Secretary Steven Chu.

Companies receiving the most money involved wid farm projects, including the Penascal wind farm ($114.1 million) in Sarita, TX; the Locust Ridge II, LLC wind project ($59.2 million) in Shenandoah, PA; the Canandaigua Power Partners, LLC wind project ($52.4 million) in Cohocton, NY; and the Wheat Field wind farm ($47.7 million) in Arlington, OR.\line Iberdrola Renewables Inc., a subsidiary of Spain’s Iberdrola SA was awarded $294.9 million for five wind projects, bringing the company’s investment so far in U.S. wind power to about $1 billion. The 12 winning projects could produce 840 megawatts of electricity, representing a 3 percent increase in total U.S. renewable electricity generation capacity, the Energy Department said.

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Written by William DiBenedetto

15 September, 2009 at 9:12 am

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