Guangdong has allocated 100 million yuan ($15.7m) to a low-carbon fund that will be funded by revenue from CO2 permit auctions and increase six-fold over time.

The provincial government announced it had approved 100 million yuan to the fund’s first tranche, and appointed the Technology Finance Group, a government-backed capital venture firm, as fund manager.

The first allotment is expected to be invested in 2015, with further funds made available next year.

“The finance department has arranged a 600-million yuan budget to set up a provincial low-carbon development fund … using auction revenues, to attract private investment in low-carbon projects,” said a notice published on the government website, dated Oct. 23 and signed by the provincial finance department and Development and Reform Commission

The southern province is the only Chinese pilot carbon market that holds regular CO2 permit auctions, and has raised over 770 million yuan through selling nearly 15 million allowances since the market started in Nov. 2013, of which 600 million will be invested in the fund over time.

The announcement did not go into details on how the fund will operate or which investment criteria will be put in place, but officials have previously said it would invest in low-carbon projects and help develop the provincial emissions trading market.

By Stian Reklev – stian@carbon-pulse.com

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