isramart : S.Korea KDB jointly funds $80 mln Malaysia CDM project

isramart news:
SEOUL, July 7 (Reuters) - Korea Development Bank is looking to ramp up funding for carbon offset projects in Asia under the U.N.’s clean development mechanism and is jointly financing an $80 million Malaysian project, a bank source said on Tuesday.

State-owned KDB, which aims to become Asia’s top carbon investor, is financing about $50 million of the project that aims to cut greenhouse gas emissions from a large palm oil processing cluster.
“There is one CDM project KDB is participating as a financial adviser and investor along with other Korean and foreign investors,” said the source, who did not want to be identified because he is not authorised to speak to the media.
The project aims to use palm oil waste to generate 70 tonnes per hour of steam, which in turn will be used to produce 23 megawatts of electricity.

The emissions savings will mean the project will also yield 300,000 U.N. carbon offsets called certified emission reductions (CERs) per year. Each CER represents a tonne of carbon dioxide-equivalent saved from being emitted.
The CDM, part of the U.N.’s Kyoto Protocol, allows industrialised countries with a greenhouse gas reduction commitments to invest in projects that reduce emissions in developing countries.

In return, the investors earn CERs that can be sold for profit or used to meet emissions obligations at home.
The source said KDB will be involved in debt and equity financing of CDM projects, emissions credits trading, brokering via KDB Ireland and investing in clean technology ventures.

“There are several projects across Asia (e.g. China, Thailand and Malaysia) under review process,” he said.
The projects under review include a Chinese nitrous oxide reduction CDM project to generate 500,000 to 600,000 of CERs per year. This project would need about $3 million of investment.

Nitrous oxide (N2O) is a powerful greenhouse gas.
KDB is also planning to raise $400 million to launch a “green fund” for investing in renewable energy, power generation by wind, solar and biomass, the bank source said.

South Korea said on Monday it would invest 107 trillion won ($84.37 billion), or 2 percent of GDP, in environment-related industries over the next five years.