The prospects of an international deal on new climate financing mechanisms received a boost earlier today (03 Dec 2010), when the European Investment Bank (EIB) announced it has granted €500m (£425m) to China to support the development of low-carbon projects.
The loan, which was signed off at a ceremony in Beijing, represents the second major clean tech loan provided by the EIB to China.
“This operation ranks among the EIB’s most efficient loans in terms of GHG emissions reduction,” said EIB vice president Magdalena Álvarez Arza. “It is estimated that up to three million tonnes of CO2 will be saved every year with [the bank’s] first Climate Change Framework Loan, and we are looking forward to achieving the same performance with this second framework loan.”
The loan has been earmarked for up to 15 projects in a wide variety of sectors, including onshore wind, biomass, solar, geothermal and small hydro energy projects, as well as initiatives to improve energy efficiency and reduce greenhouse gas emissions on industrial sites.
Álvarez Arza acknowledged that the loan “is coming at an opportune time”, given the ongoing negotiations in Cancun.
Scepticism among emerging economies over the willingness of industrialised nations to provide grants and loans to help them cut greenhouse gas emissions has been one of the main stumbling blocks in the long-running negotiations, and the EIB’s move appears designed to bolster confidence that the EU will continue to increase access to finance for climate change projects in developing countries.
The news comes as Reuters reported that China is working on plans to invest up to $1.5tn (£956bn) over the next five years in a handful of strategic industries, the bulk of which are focused on curbing greenhouse gas emissions.
Citing a source with close links to the country’s leadership, the news agency said the government was considering a plan to invest $300bn a year over the next five years in a number of selected industries, including alternative energy, biotechnology, IT, advanced materials, alternative-fuel cars and energy-saving and green technologies.
The news will further fuel speculation that the Chinese government is preparing to put a low-carbon industry at the centre of its next five-year plan, which will be unveiled early next year and is expected to include commitments to cut the country’s carbon intensity by 35-45 per cent by 2020.
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