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Pakistan may get FDI worth $1.7bn from 120 CDM projects: minister
Tuesday, June 29, 2010
KARACHI: Pakistan is likely to get foreign direct investment worth 1.715 billion dollars from the 120 clean development mechanism (CDM) projects that are in the pipeline, said Federal Minister for Environment Hameedullah Jan Afridi on Monday.
He was speaking at a seminar to introduce the business opportunity of Carbon Finance through CDM of Kyoto Protocol under the United Nations Framework Convention on Climate Change (UNFCCC).
These projects will help in green house gasses (GHG) reduction of 28 million tons CO2 equivalent a year, he said.Pakistan has so far approved 25 CDM projects that will bring in FDI of around 742 million dollars and help in GHG reduction of 4 million tons CO2 equivalent a year, Afridi said.
The CDM Executive Board has registered six projects (out of the 25) which will generate 195 million dollars worth of foreign direct investment (FDI), Afridi said.Foreign companies invest in GHG emission control in developing nations and swap these carbon credits in home countries where this practice is too expensive and proves uneconomical, Afridi explained.
Carbon Finance through CDM was an attractive business opportunity and an increasing number of governments and private companies are now entering the market, he said.Potential for CDM projects exists in energy efficiency, alternate and renewable energy production, cleaner technologies in industrial processes, and improvements in agriculture and forestry practices, Afridi said.
The Ministry of Environment and Korean Trade and Investment Agency (KORTA) had jointly organised the seminar at a local hotel.The CDM under the Kyoto Protocol of 1997 has been particularly introduced for the developing countries for initiating sustainable development projects in return for Carbon Credits that can be sold to developed countries.
The business is expected to grow to billions of dollars, Afridi said.
Pakistan offers technical and financial opportunities to attract international investors in the carbon finance, he said.
He appreciated the Korean companies interest in CDM project activities.Korean Consul General Lee In-ki highlighted the aim and objective of the seminar. He gave background of KORTA and briefly described the profile of Korean companies interested to invest in CDM projects in Pakistan.