ADB sets up funds for clean energy projects in Asia

 

The Asian Development Bank will help establish five private sector funds targeting investments of up to $1.2 billion (Dh4.4 billion) for clean energy projects in Asia, the bank said on Thursday.

 

The Manila-based bank said it will provide $20 million (Dh74 million) to each of the five private equity funds, for total seed money of $100 million (Dh368 million).

 

“ADB believes the success of these funds will help demonstrate the credibility of private equity in the emerging clean energy sector in developing Asia, and mobilise capital to support other private equity funds,” Mu-Shin Kim, Investment Specialist in ADB’s Private Sector Operations Department, said in a statement.

 

The funds MAP Clean Energy Fund, China Environment Fund III, GEF South Asia Clean Energy Fund, Asia Clean Energy Fund, and China Clean Energy Capital were selected from 19 fund managers who responded to ADB’s call in July 2007 for the establishment of clean-energy focused private equity funds.

 

By 2030, global energy demand will likely rise 53 per cent from current levels, with a large portion of the demand coming from developing countries in Asia, ADB said.

 

The energy investment in the region is highly dependent on coal-fired power generation and significant resources need to be invested into clean energy and low-carbon alternatives over the next few decades, Kim added.

 

Coal is considered the dirtiest, most carbon intensive of all fossil fuels. Emitting 29 per cent more carbon per unit of energy than oil and 80 per cent more than gas, it is one of the leading contributors to climate change, according to the environmental group Greenpeace.

 

The MAP Clean Energy Fund (MAP) has the largest target size of the five funds, aiming to invest $400 million (Dh1.5 billion) in 10-15 projects across Asia, with a focus on Indonesia and Southeast Asia. Projects include geothermal ventures in Indonesia, wind projects in India and Pakistan, and bio-ethanol farms in the region without competing with food crops.

 

The other funds target mobilising investments ranging from $100-250 million (Dh368-920 million). (AP)

 
 
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