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Demand Outstrips Supply for Clean Energy Deals

Despite keen interest and deep pockets, demand for clean energy-related investments is so high that cleantech investors around the world are having a hard time spending all the cash they have at their fingertips, according to a report by research group New Energy Finance.

The annual report, released Thursday, takes stock of venture capital and private equity investment in clean energy in 2006 and the first half of this year. It documents continued off-the-charts growth for the ever-popular sector, with overall venture and private equity investment in the sector leaping 67 percent to $18.1 billion in 2006.
But clean energy venture capitalists invested only 73 percent of the total money available to them in 2006, leaving some $2 billion in their pockets, according to the London-based group.

“Our sense is that the supply/demand imbalance has gotten a little stronger this year than in the past, said Ethan Zindler, an analyst with New Energy Finance. “If you roll back the clock 18 months, you did not as often hear the complaint from VCs that they were having trouble finding opportunities.”

That’s not to say opportunities are lacking. Quite to the contrary, as the report shows.

The group found that the ranks of venture capital and private equity investors in clean energy technologies, firms, and projects have swelled nearly 30 percent since last year to more than 1,800. Meanwhile, more than 190 funds invested exclusively in cleantech, clean energy, or renewable power, according to the research firm.

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