Kleiner Perkins Caufield & Byers, the Menlo Park venture capital group, confirmed  yesterday that it is starting a cleantech fund. Rumors have been flying for weeks, sparked by targeted hiring and pitches the firm made to limited partners. Rumors fell a little short of actual events, citing the capital figure as a number almost $100 million below the actual funds Kleiner Perkins put together. The fund will be managed by Kleiner Perkins partner John Denniston and Ben Kortlang (who left Goldman Sachs for this position).

Denniston was one of a Kleiner Perkins team responsible for launching the company's Greentech investment initiative. He is also a key participant in the Greentech Innovation Network (a group of policy makers from business, academia and government focused on green technology and policy).

The new fund, known as the Green Growth Fund, has $500 million with which to fund new ventures. Any company trying to talk the fund managers into a little financial aid will need to be able to show that they can speed up adoption of solutions to climate issues on a global basis. Furthermore, companies must have already reached their growth phase — no barebones ideas here!

While the exact amount has not been disclosed, a significant amount of the fund's capital comes from Generation Investment Management. Generation is nicknamed "Blood and Gore" for its leadership: chairman Al Gore and CEO David Blood. Kleiner Perkins and Generation have collaborated previously.

In addition to the Green Growth Fund, Kleiner Perkins is forming a $700 million fund focused on funding cleantech ventures, as well as IT and life sciences companies. KPCB XIII, as the fund will be known, will back entrepreneurs in the early stage of their products.

Kleiner Perkins' website states: "Greentech could be the largest economic opportunity of the 21st century. It is an unprecedented challenge that demands great innovation, speed and scale." No matter what altruistic reasons that the company may use to justify their choices of ventures that they fund, the investors behind Kleiner Perkins know that there is big money to be made in cleantch. Beyond the demonstrated need for cleantech technology, sustainable companies make for better investments and Kleiner Perkins is ready to make the most of that fact. Since the firm's establishment in 1972, it's been able to get in on the early stages of information technology and biotechnology, both of which have paid off. The firm also earmarked a significant chunk of its main fund ($600 million) for early stage greentech initiatives in 2006.