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ADB to Invest in Greater Mekong Subregion, Clean Energy Fund
MANILA, PHILIPPINES - The Asian Development Bank (ADB) will invest $15 million to support clean energy projects in the Greater Mekong Subregion (GMS) and South Asia through the Mekong Brahmaputra Clean Development Fund.
The fund will invest in companies engaged in renewable energy, energy efficiency, and water conservation and waste recycling projects. It expects to invest in at least 10 clean energy and environment projects by 2014.
Many people in the GMS and South Asia have no access to modern forms of energy. In 2008, 83% of households in Cambodia, 80% in the Lao People's Democratic Republic, and over 50% in Viet Nam still used wood for fuel so it is critical to increase sustainable energy investments. The situation is often worse in South Asia.
At the same time, strong economic growth throughout Asia has already put substantial pressure on the region's resources and is straining the environment. Further development of carbon-based power generation capacity, such as coal and oil, needs to be carefully evaluated to ensure that access to energy does not come at the price of steadily increasing greenhouse gases, contributing to global climate change.
At climate change discussions currently underway in Copenhagen, Denmark, experts have stressed the havoc that rising greenhouse gas emissions could wreak on livelihoods in Asia and the Pacific if left unchecked, and urged governments in this region and the rest of the world to find ways to halt or reverse climate change.
"Further economic development in the Greater Mekong Subregion and South Asia requires greater access to energy. We must help meet this demand for energy in a way that is sustainable and doesn't further damage the environment," said Philip Erquiaga, Director General of the Private Sector Operations Department at ADB.
The fund has a target size of $100 million and will be managed by Dragon Capital Clean Development Investments Ltd., a subsidiary of the Dragon Capital Group, which has longstanding experience in asset management in Viet Nam. Other investors in the fund include the Belgian Investment Company for Developing Countries, the Finnish Fund for Industrial Cooperation, and the Netherlands Development Finance Company.
"Private investors and financiers can play an extremely important role in the development of alternative sources of energy in Asia. We hope that ADB's participation in the fund will encourage other private-sector players to invest in clean energy projects that will generate both attractive rates of return and a cleaner, more environmentally sustainable future," said Mr. Erquiaga.