Japan creates clean energy fund

Will support local companies and reduce carbon dioxide emissions.

The Ministry of the Environment has set aside US$14 million for the fund for fiscal 2013. The fund will invest in projects with private investors for as much as a half of equity.

Green Finance Organization will manage the fund and pick about five to 10 projects for the year through March 31.

“We want to support projects that are led by regional companies and financial institutions,” said Kazuhiro Okuma, an official in charge of the fund. “It’s important to create a model for sustainable society by promoting low carbon projects and revitalizing local communities at the same time.”

The move came a year after Japan introduced an incentive program for clean energy that has boosted solar capacity more than any other renewable source. Solar is faster to build than other types such as geothermal or wind, both of which must be assessed for their environmental impact.

“There are many large-scale solar projects by big companies but not much else is really increasing,” Okuma said.

For renewable projects that require a lot of initial investment, regional companies tend to lack capital and local lenders do not have much experience in project financing, he said.