Japan will increase yen loans and investment in clean-energy technology to help cut greenhouse emissions in China and India, Asia's two economic powerhouses.

The Japan Bank for International Cooperation, the government's main overseas lender, said the investment is part of the US$12 billion in loans and grants Prime Minister Yasuo Fukuda has promised to spend in five years to tackle climate change.

"We have to focus on major developing countries, and as a financier we are going to put more and more money into private-sector investment in these countries, not only by lending but also by equity financing," Takashi Hongo, director-general of environment finance at JBIC, said in Tokyo. Hongo declined to say how much money the bank has set aside for the projects.

Japan, together with the World Bank, the United States and the UK plans to raise a US$5.5-billion fund to help poor nations develop clean technology. Finding ways to convince developing countries to agree to emissions targets is likely to be a focus of the Group of Eight industrialized nations summit in Japan's northern island of Hokkaido next week, Bloomberg News said.

"We are proposing to utilize multi-governmental funds as a tool to mitigate investment risks in developing countries and boost capital spending by private companies on clean projects," Hongo said. The fund "should be used as a kind of catalyst to attract private money."

Money vow

Environment ministers of the Group of Eight rich nations in May also vowed to raise a pool of money to develop technologies that would help them meet a goal of halving global emissions blamed for global warming by 2050.

Hongo named carbon-capture-and-storage technology, in which carbon-dioxide is caught in the air and stored underground, as "the key" to reaching the emissions-cutting goal.

G-8 energy ministers last month agreed to jointly develop carbon capture by 2020 and launch 20 large-scale demonstration projects by 2010.

In May, China and Japan said they would cooperate in using the technology to inject carbon dioxide into oil wells to both store the gas and to make the crude more viscous, so it can be pumped faster.

(Shanghai Daily July 4, 2008)