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UK to launch Asian, African low-carbon energy funds

Published 11/18/2010, 11:16 AM
Updated 11/18/2010, 11:20 AM

* Two new public-private partnership funds next year

* UK fast-start finance is transparent, open - minister

By Nina Chestney

LONDON, Nov 18 (Reuters) - The UK government will launch two new public-private partnership funds to promote generation of renewable energy in Africa and Asia next year, the secretary of state for international development said on Thursday.

The funds will target low-carbon energy and related investments in Asia and large-scale renewable energy projects in Africa.

"We hope to launch these partnerships next year," Andrew Mitchell said at a briefing in London.

A spokesman for the UK's department for international development said it was looking at ways the funds could be financed and could not put a value on them yet or identify the potential private sector partners.

Early modelling of the Asian fund suggests that it could bring 9 pounds of private sector investment for every pound committed by the government.

Over the next 25 years, the project could generate up to 5 gigawatts of renewable energy and avoid 150 million tonnes of carbon dioxide emissions.

The African fund could generate up to 500 megawatts of new renewable energy per year from 2015, providing enough electricity for over four million households.

The government will also launch a new advocacy fund to help the poorest nations get heard in international climate change and trade negotiations.

"This fund will provide access to legal, technical and logistical support to the poorest and most vulnerable countries (...) whose full participation is essential if we are to achieve an equitable deal," Mitchell said, referring to a global agreement on climate change.

FINANCE

In its spending review in October, Britain said it would provide 2.9 billion pounds ($4.64 billion) of international climate finance to 2015. This will partly fund a 1.5 billion pound pledge of fast-start finance from 2010 to 2012.

At last year's Copenhagen climate summit, rich countries pledged $30 billion of "fast start finance" to help poorer countries adapt to climate change and reduce their greenhouse gas emissions during 2010-2012.

Although European governments have fulfilled a promise to deliver 2.2 billion euros ($3 billion) to help developing countries tackle climate change, critics have said the money might have come from rebranding existing aid pledges.

"We promised to report openly on our fast-start commitments. The UK aid transparency guarantee was testament to our commitment to be open and transparent and we are abiding by that promise," Mitchell said in response to such criticism.

"(Our climate finance pledge) gives us the credibility to press other donors to meet their commitments and press for an agreement on new and innovative sources of climate finance," he added.

Climate finance has been a contentious issue since the Copenhagen Accord last year. Developing countries say funds to help them are not enough while developed countries struggle to allocate aid in the wake of an economic downturn.

A U.N. summit in Cancun, Mexico, from Nov.29-Dec.10 will be trying to find ways to leverage finance and stimulate investment in low-carbon technologies. (Editing by Anthony Barker)

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