George Soros to Invest $1 Billion in Green Energy


"After a shaky start to the year, investors are now more willing to fork out for clean energy projects."

On Oct. 10, billionaire George Soros' gave a speech in Denmark announcing his plans to invest $1 billion in clean energy technology. Another $100 million—doled out in $10 million increments annually over 10 years—will fund the newly created Climate Policy Initiative, a foundation targeted at environmental policy.

That's a sizeable amount of cash, though Soros didn't specify where the $1 billion would be spent other than saying 'stringent conditions' will be used to evaluate potential investments. And in an ironic twist, Soros, who made a sizeable chunk of his fortune through currency speculation, put his support behind carbon taxes, not cap-and-trade systems. Why? Financial investors can too easily manipulate carbon markets.

Soros is wise to hold his cards close. With so much money on the table, potential deals could be given a 'Soros premium' if the billionaire focuses on a too-narrow clean energy brief.

Yet before we start speculating on where Soros will spend his cash, a word of caution. . .

Other high-profile figures, such as T. Boone Pickens, have made similar promises of multi-million dollar investments. Often, though, their plans have come to nothing. That doesn't mean Soros won't proceed with his $1 billion scheme. But until concrete plans are announced, I'll reserve judgment.

Indeed, the more important figure—for me—is $25.9 billion. That's the amount of money invested in green energy projects in 3Q09, according to New Energy Finance. After a shaky start to the year, investors are now more willing to fork out for clean energy projects. The gradual thawing of the credit markets certainly has helped. So have government-sponsored funds that were included in global stimulus packages.

With investment returning to the sector, maybe Soros has picked a good time to buy in. Other investors will keep a close eye on where he puts his money.

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