ADB's Carbon Fund eyes projects in India

Asia Pacific Carbon Fund, managed by Asian Development Bank, is scouting for renewable energy and energy efficient projects in India to provide co-financing and technical support.

The fund which recently (in early August) raised $151.8 million from investors, including those from Europe, has a mandate to finance Clean Development Mechanism (CDM) projects in any of ADB's 44 developing member countries.

"The Carbon Fund team is speaking with a number of project proponents in India in a number of states involving a range of CDM projects in various sectors," a ADB official said.

India was a priority for the fund due to its size and potential as well as the government's commitment to foster clean energy in the country, the official said.

He, however, declined to provide project specific information saying it might adversely impact the discussions with project developers in India.

The fund co-finances CDM projects in return for Certified Emission Reductions. The seven European countries, including Belgium, Finland and Switzerland, expect the fund to help them achieve their carbon emission reduction commitments under the Kyoto Protocol.

It seeks to be more than just a simple certified emissions reductions (CER) procurement fund and offers several advantages to CDM project developers.

The fund will chip in with funding upfront to fill the financing gaps to ensure the financial closure of CDM projects and reduce green house gas (GHG) emissions.

At present, the Manila-based multilateral funding agency is considering projects supported by its debt or equity investment in the waste management sector also. ADB also intends to consider broader opportunities in methane utilisation, biomass projects and methane capture and utilisation projects.

The fund would also offer technical support, on a grant basis, for capacity building and the development of CDM projects, the official said.