Gates pumps money into ethanol
According to an SEC filing, the Microsoft chairman holds a 25.5% stake in corn-fuel maker Pacific Ethanol.
WASHINGTON (Reuters) - Bill Gates holds a 25.5-percent stake in Pacific Ethanol Inc., resulting from a private transaction with the maker of corn-based fuel, according to a Securities and Exchange Commission filing.
Gates acquired 5.25 million shares convertible preferred stock on April 13 for $16 per share, the filing said. Those shares are convertible to 10.5 million shares of common stock.
Gates acquired 5.25 million shares convertible preferred stock on April 13 for $16 per share, according to SEC filing. Special Report full coverage
Pacific Ethanol is building an ethanol production facility in California and said in late March it hoped the deal with Cascade Investment, Gates's investment vehicle, would close by mid-April.
In the SEC filing, Cascade said it acquired the common stock "for investment purposes only" and will continue to evaluate its ownership stake and voting position.
Cascade said it would leave open the possibility of continuing to hold the stock, disposing of it or acquiring more in the open market or through private transactions, and entering into short sales or other hedging transactions.
Pacific Ethanol (Research) shares jumped more than 6 percent in morning trade on Nasdaq.
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Investors are rushing to fund new ventures in renewable energy as Americans continue to see rising gasoline prices at the pump. The price for crude oil continues to rise to new record highs ($75 per barrel of crude oil on NYMEX as of Friday's close). According to the results of a survey reported by the San Francisco Gate, in the 1st Quarter of 2006 investments in the clean technology sector has increased by 13% to $3.36 Billion in the US. In addition to attracting venture capital, clean technology companies are receiving a buzz from high profile investors.

Bill Gates, Founder of Microsoft, announced last week that his venture group (Cascade Investments) initiated the purchase of 25.5% ownership in Pacific Ethanol Inc. Pacific Ethanol is an ethanol production company that plans to expand operations by opening a new facility in California. Gates is not alone in high profile investments into the clean energy market, Bob Metcalfe (Founder of 3COM and Inventor of Ethernet), who acts as the managing partner of  Polaris Ventures, announced the VC's first investment into the energy market. Polaris, which manages over $3 Billion in funds, invested $6.8 million into  GreenFuel Technologies Corporation of Cambridge, MA. GreenFuel Technologies is an emissions to biofuels company, that utilizes natural algae in their patented bioreactors to turn greenhouse gas emissions from power plants into rich bio fuel. Polaris's investment into GreenFuel was part of the company's $18 Million Series B financing round that also included a high profile venture capital investor: Draper Fisher Jurvetson. When asked about the new industry venture, Bob Metcalfe said, "Energy has got to be one of the top five problems the world faces, and it's been frustrating to watch activists and politicians fail to solve the problem,...Now it's time for the entrepreneurs and scientists to give it a try." 

According to the International Energy Association, demand for renewable energy fuels will more than quadruple in the next decade. The current jump in oil prices is fueling investment into this relatively new market as investors view clean technology as an emerging opportunity rather than a public relations campaign. As gasoline prices continue to rise, alternative fuels become respectively cheaper and more attractive. In his latest State of the Union Address, President Bush outlined a plan to direct new investment into ethanol production and other clean technologies. According to a poll conducted by CBS News, Americans now see gas prices as one of their top three main concerns. With pressure coming from constituents, politicians are beginning to exert pressure on new spending on renewable technology to promote energy independence. Yet another front in this debate is that of environmental concern. With global warming on the rise, and many European governments eagerly searching for a Carbon Dioxide solution, the promise of reducing these emissions by 46% (as claimed by GreenFuel's bio reactor system) begins to resonate as a promising environmental and business opportunity.