ADB TO TAP US$700 MILLION TO COMBAT CLIMATE CHANGE

JAKARTA, Dec 4 (Bernama) -- The Asian Development Bank (ADB) is planning to
channel around US$700 million (US$1=RM3.38) from two new investment funds to its
developing member countries as part of a broad global initiative to help
developing countries meet the cost of actions needed to combat climate change.

Donor countries, including Australia, France, Germany, Japan, Netherlands,
Norway, Spain, Sweden, Switzerland, United Kingdom and the United States had
pledged over US$6.1 billion in 2008 for the Clean Technology Fund and Strategic
Climate Fund.

"The climate investment funds (CIFs) are being made available to
multilateral development banks, including ADB, for climate change-related
investments," an ADB statement issued here said Thursday.

"The CIF provides concessionary funds for ADB to work together with
developing member countries to transform to a low-carbon growth trajectory and
strengthen their resilience to threats posed by climate change," it said quoting
Director-General of ADB's Regional and Sustainable Development Department,
Xianbin Yao.

The Clean Technology Fund will support the deployment of low carbon energy
technologies, such as wind, solar, hydro and geothermal power, as well as
energy efficiency measures for industry, commercial buildings and
municipalities.

The statement said activities supported by the fund would get co-financing
from ADB's regular operations, and this was expected to mobilise additional
financing from both the state and private sectors.

"The Strategic Climate Fund will support pilot programmes on climate
resilience, forest investment and scaling up renewable energy use for low-income
countries, with the end goal of demonstrating effective climate mitigation and
adaptation interventions that can be expanded and replicated in future," it
added.

As example, it said, a successful adaptation programme undertaken in a delta
region such as Bangladesh could potentially be replicated in other countries
with similar geography.

The two funds are designed to be interim financing tools and will be
discontinued once the United Nations Framework Convention on Climate Change
completes deliberations on a new global programme for addressing climate change,
and the new financial mechanisms needed to support it.

"Money released by the Strategic Climate Fund will be in the form of
grants," the statement said, adding that the Clean Technology Fund would issue
concessional loans with interest on the loans as low as 0.25 per cent for up to
40 years and that risk mitigation instruments such as guarantees and equity
would also be available.

The statement said the money could be tapped for both public and private
sector initiatives.

"The comprehensive range of financing instruments available under the
Strategic Climate Fund and the Clean Technology Fund will provide a solid
platform for partnerships with ADB's developing member countries in the area of
climate change," said Teresa Kho, Director of ADB's Office of Co-financing
Operations, as quoted in the same statment.

ADB has been investing heavily in programmes and projects designed to help
countries move on to a low carbon growth path and in 2008, it spent around
US$1.7 billion on clean energy projects, up from US$230 million in 2003 and it
is now targeting annual investments of US$2 billion by 2013.

-- BERNAMA