Established in June 2014, the Japan Fund for the Joint Crediting Mechanism (JFJCM) provides financial incentives for the adoption of advanced low-carbon technologies in projects financed by the Asian Development Bank (ADB). JFJCM offers grants to projects utilizing the Joint Crediting Mechanism (JCM). The JCM is a new bilateral carbon credit mechanism initiated by the Government of Japan. As of November 2015, Japan’s cumulative contribution to the JFJCM is ¥3.6 billion (about $31.6 million).Developing countries in Asia and the Pacific are highly vulnerable to climate impact with increasing carbon dioxide emissions. A number of ADB’s developing members have signed bilateral agreements1 with the Government of Japan to host JCM projects using advanced low-carbon technology that leads to greenhouse gas (GHG) emission reductions. The GHG emission reductions achieved may be used to meet the emission reduction target of partner countries and/or of Japan.
ABOUT THE FUND
JFJCM provides grants and technical assistance to encourage the adoption of advanced low-carbon technologies in ADB-financed sovereign and non- sovereign projects utilizing the JCM. It offers the opportunity for recipients to engage in projects with strong development characteristics and long-term climate change mitigation benefits.
USES OF JFJCM GRANTS
• For SOVEREIGN investment projects—to fund incremental cost of deploying advanced low-carbon technologies from a “business as usual” technology cost including the cost related to meeting the requirements for application for the JCM.
• For NONSOVEREIGNinvestmentprojects—tofund a portion of the interest margin of ADB-financed loans in support of the project’s deployment of advanced low-carbon technologies.
• Maximum grant is $10 million or 10% of the project cost, whichever is lower.2
ELIGIBLE PROJECTS AND TECHNOLOGIES
• be implemented in eligible countries,
• have a component that adopts an advanced low-carbon technology, and • meet the JCM application requirements.
• Preparation of JCM methodology and Project Design Documents with validation and registration of the project to the joint committee of the JCM.
• Monitoring and verification of GHG emission reduction; and issuance of the JCM credits and delivery to both governments.
ADVANCED LOW-CARBON TECHNOLOGIES
• can reduce GHG emissions with energy related carbon dioxide source considerably in the long term,
• must have a proven operational and implementation record of its technical effectiveness, and
• includes renewable energy, energy saving technology, smart grid, energy- efficient bus or vehicle and waste-to-energy technology, among others.