PRINT THIS PAGE China goes green: the drive for clean air is gathering momentum in China 07/05/2008. Source: Asia Private Equity Review (APER).
According to the Netherlands Environmental Assessment Agency, China had overtaken the USA as the world’s largest emitter of carbon in 2006. During those twelve months, China produced 6,200m tonnes of carbon dioxide, compared with 5,800m tonnes from the US, while Britain produced about 600m tonnes. The government of the world’s most populous nation also recognises the pressing need for clean air, as industrial growth of the country continues to accelerate. In April this year, the State Council moved to launch the largest environment fund in China, and has set the country’s clean air drive in motion. The organisation that has been mandated to take charge of such a task is GT Consulting Ltd. which is a subsidiary of China General Technology (Group) Holding Ltd.. The latter is affiliated with the State-owned Assets Supervision and Administration Commission of the State Council.
GT Consulting Ltd. is to establish a 50 billion yuan (US$7.14 billion) China Environmental Investment Fund, an industrial fund that targets opportunities in the environmental sector of China. The fund will deploy 75% of the total capital in long-term projects, with the remaining amount to be allocated for pre-initial public offering situations. According to local reports two domestic organisations, Z.K.C. Environmental Group Co., Ltd. and the China Environmental Service Industry Association, are considering to become investors in this latest industrial fund in China.
The Asian Development Bank (‘ADB’) is also playing a role in fuelling this clean air drive in China. It recently announced the deployment of US$100 million as seed capital that will fund five clean energy funds in Asia. Of these five funds, two of them are focused on China, being China Environment Fund III and China Clean Energy Capital Fund.
Foreign investors are also seizing this new set of opportunities arising from Beijing’s earnest attempt to reduce the carbon footprint of the country. The UK-based Climate Change Capital has already set up an office in Beijing. According to Mr Yuebing Lu, managing director, Climate Change Capital has a capital pool of €870 million (US$1.36 billion) and is ready to deploy the capital in China.
The Beijing-based Tsing Capital was a pioneer in pursuing a clean technology fund as early as 2002. Currently, it is raising its third and latest fund that has a target of US$200 million to US$250 million.
In late April, China announced joining hands with the US Chicago Climate Exchange to establish a carbon emissions market in the city of Tianjin. The exchange will trade permits for emissions of greenhouse gas like carbon dioxide and sulphur dioxide (fig. 32).
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