On October 17, the European Commission and Bill Gates-led Breakthrough Energy have signed a Memorandum of Understanding to establish Breakthrough Energy Europe (BEE) – a joint investment fund to help innovative European companies develop and bring radically new clean energy technologies to the market.

“We are delivering on our commitment to stimulate public-private cooperation in financing clean energy innovation. The EUR 100 million fund will target EU innovators and companies with the potential to achieve significant and lasting reductions in greenhouse gas emissions,” Carlos Moedas, Commissioner for Research, Science and Innovation, stated.

With this initiative, the Commission takes action to continue leading in the fight against climate change and to deliver on the Paris Agreement – giving a strong signal to capital markets and investors that the global transition to a modern and clean economy is here to stay.

“Europe must continue to take the lead in tackling climate change head on, at home and across the world. We must push for the modernisation of Europe’s economy and industry in order to meet the ambitious targets put in place to protect our planet. Pooling public and private investment in new, innovative clean energy technology is key to enabling long-term solutions to reduce greenhouse gas emissions. If Europe is to have a future that can guarantee the well-being of all its citizens, it will need to be climate-friendly and sustainable,” President Jean-Claude Juncker said.

“The scale and speed of what is needed to reach our climate goals require innovative thinking and bold action. Not only is this new public-private investment vehicle being set up in record time, it will also serve as an example of us joining forces to accelerate breakthrough innovation in Europe,” Maroš Šefčovič, Vice-President of the Commission for the Energy Union, underlined.

“We need new technologies to avoid the worst impacts of climate change. Europe has demonstrated valuable leadership by making impressive investments in R&D. The scientists and entrepreneurs who are developing innovations to address climate change need capital to build companies that can deliver those innovations to the global market. Breakthrough Energy Europe is designed to provide that capital,” Bill Gates, Chairman of Breakthrough Energy Ventures, added.

Breakthrough Energy Europe links public funding with long-term risk capital so that clean energy research and innovation can be brought to market faster and more efficiently. With a capitalisation of EUR 100 million, the fund will focus on reducing greenhouse gas emissions and promoting energy efficiency in the areas of electricity, transport, agriculture, manufacturing, and buildings. It is a pilot project that can serve as a model for similar initiatives in other thematic areas.

Breakthrough Energy Europe is expected to be operational in 2019. Half of the equity will come from Breakthrough Energy and the other half from InnovFin – risk-sharing financial instruments funded through Horizon 2020, the EU’s current research and innovation programme.

Background

As our planet increasingly faces the unpredictable consequences of climate change and resource depletion, urgent action is needed to adapt to a more sustainable model. The EU, which played a decisive role in building the coalition of ambition making the adoption of the Paris Agreement possible in December 2015, is a global leader on climate action. The Commission has already brought forward all legislative proposals to deliver on the EU’s commitment to reduce emissions in the European Union by at least 40% by 2030. Beyond updating and strengthening its energy and climate legislation, the EU is developing enabling measures that will stimulate investment, create jobs, empower and modernise industries. The Commission is currently working on the long-term strategy for the reduction of greenhouse gases. The proposal will be published in November 2018, ahead of the COP24 in Katowice, Poland.

In the margins of the COP21 climate conference in Paris, global leaders launched Mission Innovation, an international partnership to accelerate clean energy innovation and provide a long-term global response to climate challenge.

By joining Mission Innovation, 23 countries and the European Commission (on behalf of the EU) pledged to double their clean energy research and innovation funding to about USD 30 billion per year by 2021.

On the same occasion, a group of investors from ten countries announced their intention to drive innovation from laboratories to the market by investing long-term capital at unprecedented levels in early-stage technology development in Mission Innovation participating countries, thereby creating the Breakthrough Energy Coalition.

In December 2017, during the One Planet Summit in Paris, Breakthrough Energy announced the piloting of public-private partnerships with five Mission Innovation members, including the European Commission.