Japan Fund for the Joint Crediting Mechanism
What is the fund?
The Japan Fund for the Joint Crediting Mechanism is a single-donor trust fund established in 2014 and managed by ADB. The fund aims to provide financial incentives for the adoption of advanced low carbon technologies in ADB-financed and administered sovereign and nonsovereign projects. The fund will provide grants and technical assistance (TA) to ADB projects utilizing the Joint Crediting Mechanism (JCM).
What are the priorities?
The fund seeks to increase the sustainability of ADB-financed and administered projects through the use of advanced low carbon technologies. The use of grants under the fund will demonstrate the effectiveness of the JCM and provide a source of additional funding to eligible ADB developing member countries (DMCs). The fund will also offer the opportunity for recipients to engage in projects with strong development characteristics and long-term climate-change mitigation benefits.
Who is eligible to access the fund?
Eligible recipients are:
- For sovereign investment projects – governments of eligible ADB DMCs, that have signed a bilateral agreement with the Government of Japan for the development of the JCM at the time of financing.
- For nonsovereign investment projects – borrowers/clients of projects to be implemented in eligible DMCs.
- For TA projects – those included in (1) and ADB DMCs that have initiated discussions with the Government of Japan on the signing of a bilateral agreement for the development of the JCM.
The above projects should meet the following criteria for eligibility:
- Defining the JCM methodology.
- Preparation of the project design documents (PDDs).
- Validation by third party entities (TPEs).
- Registration of the project with the JCM.
- Monitoring and verification of greenhouse gas (GHG) emission reduction.
- Issuance of the JCM credits and delivery to both governments.
Environmental and social impact:
- A reduction of environmental pollution, including air or water pollution, solid waste treatment, or conservation of natural resources; and /or
- Other social economic benefits, including increased job creation opportunities and better access to basic infrastructure.
Additional criteria for non-sovereign projects:
Concessional financing created by buying down the interest margin by using the fund is “additional” in that some concessional financing is necessary for the project to be viable or acceptable from a risk–reward perspective.
What type of projects and technologies will be eligible to access the fund?
The fund is aiming to support projects co-financed with ADB or ADB-administered funds or stand-alone projects which adopt advanced low carbon technology that can reduce GHG emissions, with the priority on long-term carbon dioxide reducing from energy-related activities that contribute to GHG emission reduction. The fund will also use its resources to provide technical support to the recipients in meeting the requirements of the JCM.
The advanced low carbon technology used by the project must have a proven implementation and operation record in relation to its technical effectiveness. Also, the project's GHG emission reduction capacity must have been established. Technologies in any sector are applicable as long as they meet the above criteria.
Who supports the grant?
The Government of Japan supports this fund. As of May 2017, Japan’s cumulative contribution to the fund since its inception in June 2014 amounted to ￥5.8 billion ($51.7 million equivalent).