A new fund, Breakthrough Energy Ventures, has been launched by Bill Gates. The investor and philanthropist has cobbled together a massive $1 billion to invest in clean energy. He is joined by similarly minded investors, like venture capitalists Vinod Khosla and John Doerr as well as John Arnold, the former manager of a hedge fund.
The $1 billion corpus will spend on the creation of scientific breakthroughs which will have potential to produce reliable and cheap clean energy to power the world. According to gates in his blog, the future needs reliable yet affordable energy which does not generate greenhouse gases. The fund will invest in such good ideas and will move them from the laboratory to market.
Gates, at present the richest person in the world, has invested in a number of new energies over the years. Other investors, including Khosla and Doerr, have done the same. Until now, none of the investments have been successful. There was no discovery of new technologies which were widely adopted. None of them were also financially successful. These highlights the challenges faced by the fund: It can be extremely hard to develop successful clean energy technologies. It is also quite hard to select a new technology for further development. Gates and other investors, however, are optimistic on this front: they believe that invention of clean energy is a doable proposition.
It is a given that Breakthorough Energy Investors have a much higher risk tolerance. They are quite willing to wait for a much lengthier time compared to standard venture funds when it comes to return on investment. The investors’ group has laid out a total of five “grand challenges”. These five challenges, according to the investors, contribute to the maximum greenhouse gas emissions in the world. These include electricity, food, buildings, transportation and manufacturing.
The announcement of this fund comes just after a year of the Paris climate change talks. These were hosted by the United Nations. Gates publicized his Breakthrough Energy Coalition at these talks. He showed the gathering that he has the financial heft of about 20 billionaire leaders from all around the globe. There were also a significant number of institutional investors, committed to invest in brand new kinds of energy. This coalition, in a partnership with the Mission Innovation, which is a cluster of EU and 20 countries, have promised to double investment when it came to research of clean energy over a period of five years.