Bill Gates raises $1 billion for Breakthrough Energy Ventures

Bill Gates collected over $1 billion in corporate investment for Breakthrough Energy Catalyst, enlisting the help of Larry Fink of BlackRock Inc. and Satya Nadella of Microsoft Corp. to mobilize support for some of the world’s most difficult clean-energy initiatives.

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BlackRock’s charity foundation is donating $100 million over five years. Microsoft and the other investors, General Motors Co., Bank of America Corp., American Airlines Group Inc., Boston Consulting Group, and ArcelorMittal SA is putting up a combination of cash and offtakes, or project purchase agreements.

In an interview with Gates on Bloomberg Television, Fink, BlackRock’s chief executive officer, remarked, “We’re not doing this to earn money.” “We’re doing this to help seed and accelerate these ideas.”

Breakthrough Energy Catalyst was founded by Bill Gates to expedite the commercial feasibility of four critical climate solutions: green hydrogen, sustainable aviation fuel, long-term battery storage, and carbon capture from the air. Catalyst will provide the funding needed to get capital-intensive projects off the ground before debt finance and government monies can be secured to cover the remaining 90% of the cost.

None of the four options are now affordable enough to encourage broad use. Jet fuel generated from more sustainable sources such as industrial waste or alcohol, for example, is around five times the price of kerosene. The Catalyst initiatives will, in theory, demonstrate that the underlying technology is cost-competitive and erase the “green premium” over conventional standards by functioning at scale.

“What occurred with wind, solar, and lithium-ion is the model here,” Gates remarked. “Those goods had extremely high costs compared to standard approaches, but luckily Germany and Japan, as well as other customers, supported the scale-up, and today those products match the typical client-investing metrics.”

The only difference today is in terms of speed. Governments that signed the Paris Climate Agreement in 2015 are rushing to attain a mid-century target of net zero emissions, which necessitates not just emissions reductions but also carbon dioxide removal from the atmosphere.

Nine of the world’s major economies, as well as a number of businesses, including BlackRock, have committed to meeting that goal.

Catalyst agreed to raise $1.5 billion in August in exchange for billions more in backing from the US Department of Energy, some of it depending on legislation. In June, Catalyst pledged $500 million in exchange for matching funding from the European Commission and the European Investment Bank for a comparable initiative on the other side of the Atlantic.

Catalyst is encouraging potential projects to fill out a request for information in conjunction with the infusion of fresh capital and pledges. Then, potentially by the end of the year, a more specific and technical request for proposal, or RFP, will be issued.

In the interview, Gates outlined a timeframe and certain guidelines:

  • In 2022, Catalyst will begin sponsoring initiatives, most likely several in each field.
  •  Early-stage expenditures, such as design, will be covered by funding, which will amount to “maybe 10%” of the overall cost.
  • The goal is to bring in around 20 firms as anchor partners, bringing the total amount of private money to $3 billion.
  • Green hydrogen and sustainable jet fuel have progressed to the point that they might “reach a low price” in three to four years.