The Breakthrough Energy Catalyst Fund, or “BEC,” is preparing to raise private and public capital to support new markets for green technology. One of the fund’s goals is to reduce the higher cost of green energy products used in the aviation industry.
The fund, backed by Bill Gates, aims to invest $15 billion in clean technology projects in the United States, the European Union and the United Kingdom, with the aim of supporting technologies at scale to help countries reach net zero emissions.
The fund identified 4 main areas: direct greenhouse gas capture, andgreen hydrogen, jet fuel and energy storage technologies, and raised $1.5 billion in private capital from charities and corporations.
BEC managing director Jonah Goldman told the Financial Times that the fund will raise up to $15 billion, or ten times the initial investment, using innovative financial structures and partnership agreements.
The fund is part of the Breakthrough Energy group, which was started by the billionaire founder of Microsoft in 2015.
Its arm, Breakthrough Energy Ventures, provides venture capital for green technology startups and includes among its board and investors other prominent business founders such as Mukesh Ambani of Reliance Industries, Amazon co-founder Jeff Bezos, SoftBank founder Masayoshi Son, and Sir Chris here.
The new BEC fund will provide three types of capital – charitable donations, equity investments in sub-markets and product purchase agreements – to fund large projects that would not be financially viable.
It will also focus on creating markets for green products and technologies and lowering the cost of production for materials such as green steel and green hydrogen.
This has attracted the interest of steel group ArcelorMittal, General Motors, as well as founding partners American Airlines, Bank of America and Microsoft.
One of the goals of the BEC, which does not expect normal financial returns – is to reduce the “green incentive” for products such as sustainable aviation fuels.
Green incentive, or green premium, refers to the additional cost of environmentally friendly products compared to their unsustainable counterparts, such as regular jet fuel.
One example could be a refinery for sustainable jet fuel, Goldman said, whose technology has proven successful, but the economics have not supported large-scale production.