Despite the impact of the credit crunch and growing fears at the prospect of global recession cleantech investors remain bullish with 2007 marking another record year for the sector.

That is the conclusion of a major new report released yesterday by the United Nations Environment Programme (UNEP) which found that over $148bn of new funding entered the global sustainable energy sector last year, up 60 per cent from 2006.

Achim Steiner, the head of UNEP, likened the influx of investment to the Klondike gold rush of the late 1800s, but insisted that this time "a higher proportion of those looking for riches today may find them". He added "With world temperatures and fossil fuel prices climbing higher, it is increasingly obvious to the public and investors alike that the transition to a low-carbon society is both a global imperative and an inevitability," he observed. "This is attracting an enormous inflow of capital, talent and technology. What is unfolding is nothing less than a fundamental transformation of the world's energy infrastructure."

The report, which was carried out by UK research firm New Energy Finance, found that the credit crunch had a negligible impact on investment levels during 2007. It also revealed that while the market began 2008 in a "somewhat subdued" manner with a number of wind developers sold off projects and the US ethanol industry undergoing restructuring it quickly rebounded in the second quarter of the year with venture capital investment rising 34 per cent on the second quarter of 2007.

There was also evidence that the cleantech investment boom is becoming genuinely global in nature. Europe and the US continued to attract the bulk of the investment, however China, India and Brazil saw their share of new investment rise from 12 per cent in 2004 to 22 per cent in 2007, a fourteen-fold increase from $1.8bn to $26bn.

Michael Liebreich, chief executive of New Energy Finance, said that wind and solar continued to dominate the sector with 100GW of wind capacity now installed worldwide and cash flowing into the solar industry to address bottlenecks in silicon supply and bolster new thin film technologies. He added that technologies such as geothermal and biomass are also "lining up to be the next ones to begin a real march to scale".

However, he warned that investment in Carbon Capture and Storage(CCS) technologies, regarded as many as essential to help curb emissions from coal-rich countries such as the US, India and China, had failed to live up to expectations, largely as a result of "murky" regulatory and funding environments for CCS projects.

The report said that investment will need to continue to grow strongly to ensure targets for greenhouse gas emissions, but added that the recent boom in investment in the face of economic uncertainty lends confidence such targets can be achieved. "Investment between now and 2030 is expected to reach $450 billion a year by 2012, rising to more than $600bn a year from 2020. The sector's overall performance during 2007 and into 2008 sets it on track to achieve these levels," the report said.

However, Steiner warned that such levels of investment will only be achieved with improved support from world governments and the development of a genuinely global climate change deal. "[The transformation in the world's energy supply] is only inevitable if creative market mechanisms and public policy continue to evolve to liberate rather than frustrate this clean energy dawn," he said.

The report came on the same day as the World Bank Board of Executive Directors gave formal approval to the creation of two new climate change investment funds designed to help developing countries curb carbon emissions and adapt to the im pact of climate change.

The bank said that it expected to raise up to $5bn through the two funds, which will be disbursed as grants or highly concessional loans to support clean technology and climate adaptation projects.