The Asian Development Bank (ADB) will promote low-carbon technology in Indonesia and other developing countries of Bangladesh, Cambodia, Lao Peoples Democratic Republic, Maldives, Mongolia, Palau, and Viet Nam.
An ADB press release to ANTARA News on Thursday quoted that the bank has announced the establishment of a new trust fund to support the adoption of advanced low-carbon technologies in its developing member countries, with a grant of around US$17.65 million from the Government of Japan.
Japans Environment Minister Nobuteru Ishihara and ADB President Takehiko Nakao on Wednesday signed a Letter of Intent for Cooperation on Environmental Issues, which will include cooperation for effective implementation of the Japan Fund for the Joint Crediting Mechanism (JFJCM).
“The establishment of the JFJCM is a timely step to help meet the demands of the Asia and Pacific regions for sustainable low-carbon infrastructure,” Nakao announced at the signing ceremony.
He noted that the funds will provide grant finance to reduce the cost of advanced low-carbon technologies, such as those related to waste-to-energy schemes and smart grids, which often have initial high investment costs and long cost recovery periods.
Various advanced low-carbon technologies face significant barriers to adoption, such as high upfront costs and a perceived risk that the technology will not perform to expectations.
The JFJCM will offer upfront grant financing and technical assistance to address these issues.
With the establishment of the JFJCM, ADB is the first multilateral development bank to have a trust fund for supporting greenhouse gas reduction projects under the Joint Crediting Mechanism (JCM).
The JCM is a bilateral carbon market mechanism between the Government of Japan and developing countries to promote greenhouse gas emissions reduction projects.
It complements multilateral carbon market schemes, such as the Clean Development Mechanism (CDM), and follows a similar approach to the CDM for financing and accounting of verified greenhouse gas emissions reductions.