The White House and the Department of Energy (DOE) today announced an initiative to raise $2 billion in clean energy investments, with commitments from institutional investors.
The Obama Administration said the program is intended to help “reduce transaction costs, spread promising investment models, and increase [clean energy investors’] climate mitigation impact” to catalyze more private investments.
“Foundations and institutional investors have the potential to play an important role in accelerating our transition to a low-carbon economy and cutting carbon pollution,” Brian Deese, deputy director of the office of management and budget, wrote in the announcement.
According to the DOE, leveraging the government’s expertise and technologies would help impact investors scale up opportunities in energy innovation, “from laboratory R&D to startup funding to growth-stage financing.”
“Foundations and institutional investors have the potential to play an important role in accelerating our transition to a low-carbon economy and cutting carbon pollution.” —White House
To jump-start the initiative, the University of California (UC) Board of Regents said it would allocate at least $1 billion of its endowment and pension assets to profit-oriented, clean energy investments over five years.
“We are pleased that the White House has recognized UC’s leadership in sustainable investing and commitment to maximizing the positive impact on the planet,” the university’s President Janet Napolitano said.
The university said it would aim to partner with philanthropists to de-risk startup technologies with “high climate-related impact potential,” and target for-profit investments that could deliver both strong returns and climate change mitigation. It would also engage with other large institutional investors to help proven technologies and companies reach commercial scale.
The William and Flora Hewlett Foundation and the Schmidt Family Foundation also said they would build alliances with other investors to finance innovative technologies and allocate a significant amount to impact investing.
In addition, Wells Fargo committed $100 million in environmental grants by 2020 to help “accelerate the transition to a greener economy.”
The White House will host a Clean Energy Investment Summit with institutional investors later this spring to help open up discussions and bulk up impact investing.
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