Clean Energy

Carbon Market Initiative

ADB's Carbon Market Initiative (CMI) helps developing countries tap into the growing global carbon market - estimated at $30 billion in 2007 - so they can more systematically address the low-carbon transition needed in the region.

Although there are already numerous public and private carbon procurement programs in the market, most provide payment only upon project completion and when the carbon credits are delivered. As a result, many clean energy projects, especially in developing countries, face a critical upfront financing gap that prevents them from being undertaken in the first place.

CMI thus supports the development of energy efficiency, renewable energy, and other greenhouse gas mitigation projects by providing upfront cofinancing for project preparation and implementation. It does this through three major activities, Asia Pacific Carbon Fund, Technical Support Facility, and Credit Marketing Facility. A fourth - Future Carbon Fund - announced in July 2008 will use carbon credits generated beyond 2012 to provide financing for clean energy projects.

Asia Pacific Carbon Fund
Established and managed by ADB on behalf of fund participants, APCF upfront cofinancing to Clean Development Mechanism projects for future delivery of certified emission reductions. The fund is now fully operational with more than $150 million in commitments from participants.

Technical Support Facility
CMI provides targeted technical support to project developers and sponsors to conceptualize and prepare clean energy projects eligible for the Clean Development Mechanism.

Credit Marketing Facility
CMF offers ADB's developing member countries marketing support for their carbon credits to be sold in the global carbon market, creating opportunities for governments, developers, and investors to take advantage of the carbon market.

With ADB's involvement in projects offered through the CMF, sellers can benefit from the expertise of the experienced CMI team at ADB and the marketing support from CMF to attract potential buyers.

Future Carbon Fund
ADB hopes to extend CMI's services into the future - beyond the year 2012, when current global commitments under the Kyoto Protocol ends.

The fund will stimulate new investments in clean energy projects even before a new international agreement is reached. It will provide financing up front for ADB-supported projects that will continue to generate carbon credits after 2012.

The initial target size of the fund is $100 million, to be increased to $200 million if sufficient demand exists.