Clean tech venture funding in North America and Europe surged 40 percent in 2007, capped by an unexpectedly strong fourth quarter despite growing uncertainty in the global economy.

Venture investment in clean tech across the regions reached $5.18 billion in 2007, up from $3.6 billion in 2006,  The Cleantech Group reported on Thursday.

“Despite strong headwinds building in the global economy and tightening credit markets, the medium and long-term value propositions for clean tech opportunities sustained the sixth consecutive year with unexpectedly robust growth," The Cleantech Group representative   Nicholas Parker said in a statement.

The study cited high energy costs, global competition for resources, and increasingly favorable government policies as drivers for clean tech investors.

North American companies continued to receive the bulk of clean tech venture financing in 2007, receiving more than three times their European counterparts. But both sides of the Atlantic saw gains in overall financing.

Investing in North America grew 38 percent in 2007, reaching $3.95 billion from $2.87 billion in 2006. European financing grew 34 percent, from $915 million in 2006 to $1.23 billion in 2007.

By region, Californian companies received the most financing across all clean tech sectors, representing $966 million, or 35 percent of the total. The Northeastern United States was especially strong in energy storage, getting $208 million, up from $39 million the year before. While Western Europe was strongest in recycling and waste, grabbing $81 million, up from $17 million in 2006.

Companies focused on energy generation garnered the most funding, totaling $2.75 billion in 172 deals. Energy storage companies came second in overall funding, with 20 deals worth $471 million.

But three of the five largest venture rounds in 2007 went to companies based outside North America, despite the disproportionate venture money flowing to companies there.

Spanish solar photovoltaic maker Isofoton had the largest round of 2007 with $205 million. Ethanol producer Brazilian Renewable Energy got $200 million, and Chinese PV maker Yingli Green Energy Holding received $118 million.

The two U.S. companies in the top five, electric car service Project Better Place and thin-film PV maker HelioVolt, got $200 million and $101 million, respectively.

The Cleantech Group is withholding results for China, India, Brazil, and Australia until its upcoming conference in February. The research firm did say that there was continued and significant investment growth in those countries in 2007.

Total venture funding for clean tech in North America and Europe:

2007: $5.18 billion

2006: $3.6 billion

2005: $2.5 billion

2004: $1.8 billion

2003: $1.7 billion

2002: $899 million

2001: $714 million

Source: Cleantech Group

Top five categories by total venture funding in 2007 in North America and Europe:

Energy Generation: $2.75 billion; 172 deals

Energy Storage: $471 million; 20 deals

Transportation: $445 million; 20 deals

Energy Efficiency: $356 million; 41 deals

Recycling & Waste: $291 million; 17 deals

Source: Cleantech Group