Start-up funding for clean energy companies around the world has slumped in the last quarter, falling nearly a fifth since the previous three months, according to a new report.

Investment by venture capital and private equity firms in clean technology and renewable energy companies has fallen from €4.3bn to €3.5bn ($5.5bn) since the second quarter, the survey found.

The report blamed a lack of consistent government support for the drop. Douglas Lloyd, the chief executive of VB Research, which carried out the study for Taylor Wessing, the law firm, said: “A lack of a solid, consistent policy will undermine investor support, and there is a lot of that going on.”

The findings come at a sensitive time, with governments preparing to meet in Cancun for the summit on climate change that begins next week, following the Copenhagen meeting, which was widely judged to have been a failure.

Policymakers have recently expressed doubts that countries would sign up to a binding global agreement on emissions and green energy at Cancun, and many are instead focusing on the next summit in South Africa in 2011.

But it is not just the lack of international agreement that has spooked investors. Many reacted angrily, for example, to recent moves by the Spanish government to cut the subsidies it offers to wind and solar power producers.

In the survey of 200 green energy executives and financiers, 50 per cent of companies said uncertainties over policy or incentives were a “very common” obstacle to securing funding.

Mr Lloyd added that those countries benefiting most from investor backing for clean energy companies were those willing to back certain sectors over others.

“Governments that have said, ‘We are going to focus on three or four sectors’ typically have done better,” he said.

“In an environment where money is in short supply, if you back a smaller number of sectors, you can do more with it.”

But Mr Lloyd said the findings were not necessarily negative, and showed the growing maturity of the clean energy market. “There has been a dose of realism – you can’t fund every solar project or every wind project. Investors are looking a bit more carefully,” he said. “It’s not a market that is mature, but it is definitely maturing.”

The drop in investment was particularly marked in Europe, where levels fell 35 per cent. Venture capital funds showed the biggest retreat, with investment falling 73 per cent to €82.9m, its lowest level in two years. That left private equity accounting for 90 per cent of total European investment in the sector.

Investors are also worried about capitalising on such investments, with buy-out activity and public flotations becoming increasingly difficult. Global M&A activity in the sector dropped about 50 per cent, from €11.7bn in the previous quarter to €5.9bn.

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