Despite political headwinds in the United States, global investors are signaling strong confidence that the shift toward clean energy is here to stay. Two major funds announced this week underscore that sentiment, with a combined $21 billion committed to projects and companies driving the transition.
Brookfield revealed it has raised $20 billion for its second energy transition fund, 33% more than its first in 2021. The firm has already deployed $5 billion into renewable power developers focused on solar, wind, and battery storage. Raising a larger fund in a less exuberant economic climate suggests investors see long-term value in the sector rather than a passing trend.
Energy Impact Partners also closed its third flagship fund at $1.36 billion, about 40% larger than its predecessor. The venture investor, known for backing growth-stage climate companies, typically participates in rounds averaging $26 million. Recent investments include GridBeyond, which manages distributed energy resources, and Quilt, a manufacturer of residential heat pumps.
The broader picture supports this optimism. Since 2014, institutional investors such as pension funds and endowments have allocated nearly $1 trillion to the energy transition. Climate tech venture funds, while smaller in scale, are outpacing the rest of the venture industry. They now account for 3.8% of all venture capital raised globally, nearly double their share from 2020.
Political uncertainty in the U.S. remains a drag. Proposed policy reversals threaten tax credits and grants, and the International Energy Agency has cut its forecast for U.S. renewable deployment by 45% through 2030. Even so, global renewable capacity is expected to double by the end of the decade, driven by strong growth in China, India, Europe, and Sub-Saharan Africa.
Analysts at DNV project that renewables will supply 65% of global electricity by 2040 and almost all of it by 2060. It may fall short of achieving net-zero by 2050, but the momentum clearly points toward continued expansion. The short-term turbulence in the U.S. does little to alter the global trajectory: investors are still betting that the energy transition isn’t going away.