Private Equity News & Analysis

ArcelorMittal commits $208m to cleantech

The Luxembourg-based steel producer has launched two funds targeting cleantech and carbon credit-producing investment opportunities. The cleantech fund has made its first investment in solar company Miasolé, injecting $20m into the company.

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Luxembourg-based metals and mining giant ArcelorMittal has launched a $50 million (€31.6 million) clean technology fund and a €100 million ($158.2 million) carbon fund.

The clean technology fund has initially been funded with $50 million although a company spokesman said ArcelorMittal may decide to increase this amount in the future. Sectors targeted within cleantech include solar, wind, biofuels, carbon sequestration, demand management and waste heat utilisation.

ArcelorMittal’s clean technology fund will work in partnership with four California-based venture firms: Bessemer Venture Partner, Khosla Ventures, Kleiner, Perkins, Caufield & Byers and Vantage Point Venture Partners. However, the venture firms are not limited partners, according to a source familiar with the fund.

The network of venture firms and ArcelorMittal will share ideas and opportunities, sometimes co-investing, said the spokesman. All investments will be approved by a six-person investment committee chaired by Lou Schorsch, chief executive of ArcelorMittal’s flat carbon business segment in the Americas. Deals may be sourced either directly by the company or by its venture partners.

The clean technology fund’s first investment of $20 million was made in California-based thin-film solar panel company Miasolé. Miasolé’s technology is similar to that of Germany’s Sulfercell which recently received €85 million in funding led by Intel Capital and Climate Change Capital.

Bessemer Venture Partner, Kleiner, Perkins, Caufield & Byers and Vantage Point Venture Partners are also investors in Miasolé.

The carbon fund, initially €100 million in size, will target investment opportunities with the potential to generate carbon credits under the Kyoto Protocol. Sectors for investment include renewable energy, energy efficiency, methane capture and greenhouse gas reducing technologies.

Both funds will focus on technologies that have relevancy for the steel industry and its customers.

ArcelorMittal, which is listed on stock exchanges in New York, Amsterdam, Paris, Brussels, Luxembourg and several cities in Spain, had revenues of $105.2 billion in 2007. The company is responsible for approximately 10 percent of world steel output.