The bank’s President Takehiko Nakao (pictured) said the establishment of the fund “is a timely step to help meet the demands of the Asia and Pacific region for sustainable low-carbon infrastructure”.
“The fund 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.”
Due to rapid economic growth, the Asia-Pacific has become a major source of greenhouse gas emissions, with the region’s carbon dioxide emissions accounting for 43 per cent of the world’s CO2 emissions in 2010.
The bank believes this share could rise to 50 per cent by 2035 and “the region’s developing countries need considerable investments to make the transition to a low-carbon development path”.
With many advanced low-carbon technologies facing significant barriers to adoption such as high up-front costs and a perceived risk that the technology will not perform to expectations, the fund will offer up-front grant financing and technical assistance to address these barriers.