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ADB to help China with cleaner energy
Updated: 2009-01-23 13:56

MANILA - China's push to make its energy sector cleaner and more efficient is to receive increased support from the Asian Development Bank (ADB), the lender said on Friday.

ADB will provide three technical assistance grants totaling US$2.8 million to support China's efforts to reduce sulfur dioxide gas emissions, increase energy savings, and strengthen a fund that supports clean energy projects, the Manila-based bank said in a statement.

Over the past two decades, China's economy has grown at an average rate of over 9.5 percent a year. But the reliance on coal for the bulk of its energy needs has resulted in harmful levels of sulfur dioxide and other air pollutants that are the primary cause of acid rain.

To support the Chinese government's target of cutting sulfur dioxide emissions by 10 percent between 2006 and 2010, an ADB technical assistance grant of 500,000 dollars will be used to design and implement a national emissions trading system. This will provide a financial incentive to companies to curb emissions and complement other government measures to reduce air pollution.

ADB will also provide technical assistance totaling 1.5 million dollars to support the government's goal of making energy savings of 20 percent by 2010. It will be used to look at steps needed to attract international financial institutions to invest in energy efficiency and conservation projects. The assistance will also help improve the scheduling of power generation by giving higher priority to zero- and low-carbon dioxide emitting power plants.

The country's China Clean Development Mechanism Fund, designed to encourage clean energy projects that generate certified emissions reductions that can then be sold to developed countries that need them, is also getting ADB policy and advisory assistance worth 800,000 dollars. It will be used to build up the capacity of the fund for promoting and supporting climate change-related projects.