The Hindu Business Line : European Carbon Fund to invest $125 m in India

ECF is the first European private fund dedicated to carbon finance. Ten large European banks have parked with it huge funds to be invested in creating carbon assets, which are market-based green house gas (GHG) emission reduction instruments.

Mr Laurent Segalen, Head of ECF, told Business Line here that India, Brazil and China have been identified for long-term investments in carbon assets. "We are looking for competent, ethical project promoters, who would utilise the funds to create new opportunities, while helping in tackling climate change problems," he said.

"India is new for us and we are talking with prospective players who would be interested in the areas of renewables. In the next three months, we hope to make our first investment," said Mr Segalen, who is here as part of the UK delegation on climate change.

He said financiers and environment experts joined hands in early 2005 to create the ECF, which is managed by IXIS Environment and Infrastructures, an asset management firm specialising in environment and infrastructure sectors and registered in Luxembourg.

ECF is keen to fund projects in the areas of wind, hydro, solar, biomass and other alternative energy routes. Professionally-managed Indian companies, with a strong social commitment, will have access to the funds. "We will be making futures contract in renewables and hence be up against high risks. Therefore, the partnership between the fund provider and the entrepreneur needs to be strong," Mr Segalen said.

ECF seeks to acquire 10 million tonnes of CERs (carbon emission reduction) from projects in India. In addition to the Kyoto Protocol, the EU launched the Emission Trading Scheme, an emission trading market of 2.2 billion tonnes of carbon-dioxide per year, involving 25 countries and 11,500 industrial and power generation sites.

The annual shortage for European entities is expected to be in the range of 60 to 120 million tonnes of carbon-dioxide. This provides the basis for the ECF investment strategy.

In the last six months, ECF studies have identified potential for million of tonnes of carbon credit purchases in developing or transition countries in Latin America, Asia, Eastern Europe, and Africa.

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