Investments from Japan's Chubu Electric Power Co., Hokkaido Electric Power Co., Mitsubishi Corporation and the Japan Bank for International Cooperation (JBIC) have created the FE Global--Asia Clean Energy Services Fund--Asia's first fund for energy service companies (ESCOs) and clean energy projects. An ESCO is a special type of company that provides services to boost energy efficiency through equipment improvements and guarantees the energy efficiency, receiving returns based on the customers' reduced energy costs.

The fund manager is Connecticut-based FE Clean Energy Group, Inc. The Asian Development Bank and Proparco, a French governmental agency for private sector financing, have also joined the fund. The total amount of the fund is about U.S.$50 million at present, but new investors are expected to raise the total to U.S.$150 million.

ESCO services and renewable energy projects in developing countries involve high levels of risk due to the lack of information and uncertainty regarding environmental regulations and policies. Public-private partnerships are needed to spread the risk. Besides capital participation, JBIC brings its negotiating strength with governments and can provide information on country risks and local investment conditions.

Both Chubu Electric Power and Mitsubishi plan to assign an employee to the fund management company to evaluate prospective investments, taking advantage of their companies' technology, expertise and networks.



Posted: 2004/09/22 03:23:51 PM
Japanese version

TAG Eco-product/Business , Energy , Non-manufacturing industry , System/Law