Asian Development Bank launches $9 Billion Plan for Solar Energy in Asia

Date: Friday, May 7, 2010
Author: Hedgetracker.com

The Asian Development Bank launched a $9 billion solar power initiative to develop projects generating 3,000 megawatts by 2012.

The announcement, which came at the regional lending agency’s annual meeting in Tashkent, Uzbekistan, said that Central Asian countries would be prime candidates for siting the projects.

“Given Central Asia’s growing demand for electricity, the availability of desert land for large- scale solar energy development, and their stated commitment to offset high carbon emissions, several countries in the region are excellent candidates for ADB support through this initiative,” ADB managing director general Rajat Nag said.

The development bank will provide $2.25 billion in direct financing, expecting to leverage another $6.75 billion in private financing for the projects. It will experiment with other methods to attract private-sector investment, such as soliciting $500 million from donor countries to “buy down” some of the up-front capital costs in solar power projects.

“With energy demand projected to almost double in the Asia and Pacific region by 2030, there is an urgent need for innovative ways to generate power while at the same time reducing greenhouse gas emissions,” Nag said. “Sustainable solar energy can be the clean power of the future if there are appropriate incentive and financing mechanisms in place.”

The initiative also includes a Solar Energy Forum to function as a knowledge-sharing platform. This forum will hold a conference in July in Manila, the headquarters of the ADB.

Separately, the ADB said it would provide $70 million for a 73-megawatt solar power plant in central Thailand, which would be one of the largest solar photovoltaic projects in the world. The project is being mounted by a joint venture that includes Mitsubishi of Japan.

“This private sector undertaking should demonstrate clearly to other investors the viability of investing in solar projects if the right financing structure including carbon credits is in place,” Joe Yamagata, deputy director general in ADB’s Private Sector Operations Department, said in a statement.

Solar power investment in North America and Europe was hit by the financial crisis, leading the industry to hope for Asia to boost its spending on this form of renewable energy.