Investors in North America and Europe doled out 13 percent more cash in Q3 over the same period in 2006. Ann Arbor, Mich.-based Cleantech Network said today that venture capitalists handed out $1.74 billion in the third quarter in North America and Europe.

The research group said that’s a 13 percent increase over the same period in 2006.

“The combination of a rapidly improving pipeline of venture grade deals, favorable public policy trends and growing consumer awareness of climate change continue to point to a positive outlook for the future growth of clean technologies,” said Nicholas Parker, chairman and co-founder of the Cleantech Group, parent company of the Cleantech Network.

North American VC investments hit a new high of $1.26 billion, representing a 50 percent increase over the previous quarter and a 36 percent increase over Q3 2006.

Venture capitalists in Europe invested $472 million, up 206% over the second quarter, but down 13 percent from the same period last year.

Energy Generation led the pack at $1.2 billion invested in Q3, with solar and biofuel taking in the most cash within that segment.

“While investments in energy generation remain strong, we’re encouraged to see increasing interest in water and transportation technologies as pressures on fresh water supply and concern over CO2 emissions continues,” said Parker.

Water and wastewater financing increased 146 percent over the second quarter on both continents.

The report also pointed out a new record for cleantech in Canada, with the country investing $109 million in Q3, 85 percent higher than the entire first half of 2007.