A federal fund that invests in new clean technologies is running out of money.
Sustainable Development Technology Canada's SD Tech Fund started in 2001 with $550 million to help companies develop and demonstrate technological solutions to address climate change and air, water and soil quality issues.
As of Thursday, $460 million had been allocated and there was only around $90 million left, SDTC spokesman Pat Breton confirmed. The foundation expects to announce the funding of two more projects before running dry by the end of the year. So far there is no word on whether more funding is on the way, Breton said.
"They're basically at the point where that money is almost exhausted …they need to be recapitalized," said Alex Wood, senior director of Sustainable Prosperity. The network, based at the University of Ottawa, researches economic policies to encourage environmental sustainability.
SD Tech Fund
The SD Tech fund has supported around 180 clean technology projects since its launch. Around a dozen involve Ottawa companies.
The fund covers up to 50 per cent of certain costs for eligible technology projects:
- Goods and services and professional and technical personnel costs for scientific, technical, environmental, management and reporting activities directly related to the project.
- Capital items required for delivery of the project that have no residual value after the funding period.
- Depreciation expenses during the funding period for items that will have value beyond the funding period.
- Feasibility studies pertaining to the project.
On average, it covers 33 per cent of those costs, requiring the rest to be made up by the private sector.
It does not cover certain other costs, such as general overhead, renting or leasing property, or marketing studies.
As of Thursday morning, CBC had been unable to reach SDTC about the status of the fund, which is designed to make high-risk investments in technologies that have already left the lab, but have not yet hit the market, generated sales or attracted enough interest from venture capitalists. For example, the fund provided $10 million in federal money to develop the Plasco plasma gasification waste-to-energy demonstration plant in Ottawa.
"This is typically investing in a place where the private sector will not invest," said Rick Whittaker, vice-president of investments for the fund, in an earlier interview. "We call it the valley of death."
The fund requires companies to raise two-thirds of their funding from the private sector.
Wood said the fund is important if Canada wants to be a player in what is becoming "very quickly one of the good news economic stories out there across the world."
He added that the clean-tech industry is booming in China and India, while it has received a real boost in the U.S. thanks to stimulus money allocated by the Obama administration.
He added that his group and others will be lobbying the federal government in support of the fund.
SDTC is an arm's-length, non-profit, government-supported foundation. Besides the SD Tech Fund, it operates a $500-million fund to support demonstration plants that produce next-generation renewable fuels.