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ADB to set up Carbon Fund by Oct

The fund meant for funding clearner energy projects in developing countries, will be set up with $150 million initially.

india Updated: May 06, 2006 16:32 IST

ADB said on Saturday that the Asia Pacific Carbon Fund, meant for funding cleaner energy projects in developing countries of the region, will be set up by September-October this year with likely initial size of $150 million.

"By end of third quarter or early fourth quarter of this year, we are going to set up this fund," ADB Director General for Regional and Sustainable Development Bindu Lohani told reporters. He said initial size of the fund is likely to be $150 million.

The fund, to be contributed by polluting companies of the developed countries, will finance cleaner energy projects based on non-fossil fuels in developing countries of the Asia-Pacific.

The companies of the developed countries will contribute to the fund through carbon credit purchases. At present, there are not enough carbon credit for purchase by the developed countries. The first deal from the fund is expected to be finalised by the middle of 2007, Lohani said.

As part of Kyoto Protocol, the developed nations are expected to reduce their emission level by 2008 to pre-1990 level.

The fund will be part of Carbon Market Initiative by the ADB, which is a mechanism to boost the viability of alternative clean energy sources in developing countries.

To another question, Lohani said ADB was reviewing its anti-corruption policies and was in the process of making these policies sector-specific instead of their current generalised nature.

"We could have these polices for the transport sector, energy sector and so on against their generally said nature at present," he said.