EU to fund renewable energy projects
Feb 7, 2009 - McClatchy-Tribune
Regional News - Hindustan Times, New Delhi
The European Union will soon launch a programme,
initially through a 300 million euro amount from the
European Investment Bank, to invest in renewable energy
projects in India. The Czech Deputy Prime Minister
Martin Bursik announced this on Friday while visiting
New Delhi following the European Union's adoption
of its new climate and energy package. The Czech Republic
holds the rotating EU presidency.
Half of the amount will be lent through the Export-Import
Bank, the other half through the Environmental Development
Agency. This programme still faces "bureaucratic hurdles."
For example, said EU officials, the finance ministry
still has to provide sovereign guarantees.
This fund is only the first step of what could be
a larger transfer of funds to India for climate change
purposes. Under the new EU carbon policy, half the
money earned by Brussels through the auction of carbon
credits can be used to fund climate change projects
in developing countries. "We can only guess how much
this would be, but it could be in the order of hundreds
of millions of euros a year," said an official.
Bursik was pleased Indian officials had already listed
1300 climate change projects for EU climate change
funding and had identified 25,000 villages which had
been targeted for solar energy enablement. He warned,
however, that "European taxpayers would need to be
shown a cost curve for such investments into carbon
mitigation so we can verify they are effective." A
system of proposing projects, evaluating and clearing
them efficiently was needed.
The EU will thus be providing carbon mitigation funding
to India through four potential channels: the existing
Clean Development Mechanism, the European Investment
Bank, carbon auction profits and the newly created
global adaptation fund. EU officials were at pains
to stress reports the CDM would be wound up following
the new policy were "wrong."
He mentioned India was the second country, after
the US, that the EU was engaging about the new European
climate and energy package. An EU official said this
reflected a view in Brussels that India, set to become
the world's third largest carbon emitter, had been
neglected on climate change.
Bursik noted coal was still a large part of India's
energy story and the EU was prepared to work with
India on "carbon storage and sequestration, as it
presently does with China." EU officials expressed
frustration at being unable to conclude a green technology
transfer agreement with India despite over a year