Cleantech investment in North America and Europe rose by 44 per cent to top $5bn last year as the sector enjoyed its sixth consecutive year of sustained growth, according to a report released last week.

The YE2007 and Q407 report from investment and research outfit The Cleantech Group said high oil prices, government incentives and increased global warming concerns had provided strong financial drivers for cleantech investors.

"We foresee continued growth over 2008 as the Cleantech market cycle moves from early adoption to mainstream driver of wealth and job creation," said Nicholas Parker, co-founder and chairman of The Cleantech Group.

Despite turbulent financial conditions during the second half of last year as a result of the global credit crunch, the report found the US and Europe produced stronger than expected growth, especially in the fourth quarter. Total investment reached $5.18bn for 2007, eclipsing the $3.6bn invested in 2006.

Cleantech investment in the US grew by 38 per cent, nearing the $4bn mark, while the number of cleantech deals increased by 15 per cent and the average deal size by 20 per cent, compared to 2006.

Similarly, European investment grew by 34 per cent last year to nearly $1.3bn. The number of cleantech deals increased by 56 per cent year-on-year and the deal size by 26 per cent.

Energy generation was the most popular cleantech investment category, accounting for $2.75bn of investment. Other noteworthy sectors included energy storage, transportation, energy efficiency and recycling and waste.

Results for China, India, Brazil, and Australia will be announced by the group next month, but preliminary results suggest a similar trend upwards investment trend.