The Microsoft co-founder and philanthropist announced his latest endeavor, the Breakthrough Energy Coalition, at the climate change summit in Paris

"We need to bring the cost premium for being clean down," Gates said Monday in an interview with CNN's New Day. "You need the innovation so that the cost of clean is lower than the coal based energy generation."

Lowering the cost of clean energy to make it competitive with fossil fuels is the best way to get poor countries to make the switch without sacrificing economic growth, Gates said. Clean energy can make air conditioning, refrigerators, stoves and fertilizer more affordable for poor people.

"All these things that enable to modern lifestyle are very energy intensive," he said, noting that five years from now, "I see the price of energy actually being lower than today, and that's for clean energy."

The new Gates fund will be fed by a group that spans more than two dozen public and private entities -- including national governments, billionaire philanthropists, investment fund managers and tech CEOs.