July 28, 2020 / 3:54 AM / 7 days ago

China's new green development fund raises $12 billion in phase 1

FILE PHOTO: Chinese flags are seen on boats on the Yangtze river in Fengdu county in Chongqing, China, October 15, 2019. REUTERS/David Stanway

BEIJING (Reuters) - China’s first dedicated environmental fund, which will invest in green projects and firms, has already raised 88 billion yuan ($12.59 billion) in its first phase, an environment ministry official said at a briefing on Tuesday.

The National Green Development Fund will mainly be used to invest in national strategic programmes such as the green development of the Yangtze river region, said Zou Shoumin, a director responsible for finance at China’s Ministry of Ecology and Environment (MEE).

The fund was formally launched on July 15 by the MEE, the Ministry of Finance and the Shanghai city government.

It is designed to support the “green transformation” of the Chinese economy and strengthen the role of the market in fighting pollution, environment minister Huang Runqiu said at the fund’s launch ceremony.

China has been trying to diversify its funding sources for its environmental programme, but it has struggled to devise new financing mechanisms to help pay the massive costs of cleaning up polluted soil and water.

Over the 2016-2020 period, the central government allocated 78.3 billion yuan to combat water pollution, 97.4 billion yuan on air pollution and 28.5 billion yuan on soil pollution, as well as another 20.6 billion yuan to tackle environmental problems in rural regions, Zou said.

“We hope the central government could continue to invest in these areas during the fourteenth five-year plan (2021-2025), especially anti-air pollution, as we will coordinate the treatment of ozone pollution and PM2.5 at the same time,” he said.

Reporting by Muyu Xu and David Stanway; Editing by Shri Navaratnam

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