The California Clean Energy Fund (CalCEF), a new $30-million public benefit investment fund created as part of the Pacific Gas and Electric’s bankruptcy settlement, has struck fund management and matching deals with three leading venture capital firms: Nth Power, Draper Fisher Jurvetson and VantagePoint Venture Partners.
CalCEF is a non-profit entity but will make for-profit investments in commercially viable companies; profits will be reinvested in the Fund. CalCEF funds target private companies creating technologies or products that will lead directly or indirectly to decreased reliance on non-renewable fuels.
Under the terms of the agreements, the venture capital firms will make equity investments in clean energy companies on behalf of CalCEF.
CalCEF has allocated $8.5 million to each of the three funds for a total of $25.5 million. Nth Power and Draper Fisher Jurvetson (DFJ) will each directly manage an investment portfolio totaling $8.5 million, with Draper Fisher Jurvetson’s allocation to be managed through DFJ AltaTerra, a DFJ affiliate fund launched to make investments in the clean technology sector.
These managers will also match each dollar invested on behalf of CalCEF with its own investments in order to maximize market impact. CalCEF will also participate as a limited partner in VantagePoint Venture Partners. The remaining $4.5 million has been reserved by the CalCEF Board for future program development.
The purpose of the evergreen non-profit CalCEF is not only to make attractive investments, but also to provide an engine of economic growth while reducing California’s dependence on fossil fuels.
Nth Power estimates that venture capitalists invested approximately $500 million in US-based energy-tech companies in 2004, representing some 2% of all VC investing.