Japan Fund for the Joint Crediting
Mechanism (JFJCM)
12 July 2017

Overview of the Asian Development Bank Established in 1966
 67 members, 48 regional members, 40 borrowing members
 3,000+ employees globally 32 offices
 AAA ratings (S&P / Fitch) Approvals in 2016: ($ million)
Total ADB
Indonesia
Loans, Grants and others*
Sovereign
Loan
Guarantee
GrantsNonsovereign
Loan
Guarantee
Equity Investment

17,471
14,97013,943
500
527
2,502
2,410
1577

1,744
1,274
1,257
17470
470
-* Does not include technical assistance and cofinancing
2Japan Fund for the Joint Crediting Mechanism

JFJCM

 Established in June 2014 as one of ADB’s trust funds
 Cumulative contribution by MOEJ: $51.7M
 Provides financial incentives for adoption of advanced low-carbon
technologies in ADB-financed projects using the JCM

Grant for Incremental costof advanced low-carbon
technologies

Sovereign Projects• Financing primarily togovernments

Non-Sovereign Projects• Financing primarily to theprivate sector

Interest subsidy to ADBfinanced loans
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JFJCM Eligible Countries
Mongolia
BangladeshMaldivesViet Nam
Lao PDR
PalauIndonesia Cambodia

2013
Ethiopia
Kenya
Costa Rica

2014
Mexico11 out of 17 JCM host countries are
ADB Developing Members
MyanmarThailand

2015
Saudi Arabia
Chile4Philippines

2016

2017

Eligible Projects and Technologies
Eligible Project Project co-financed with an ADB or ADB administered funds.
* Can be used for additional financing to ongoing ADB project.

Eligible Technology
 Advanced low carbon technologies that reduce greenhousegas (GHG) emission including CO2 from energy source.

 The technologies must have a proven implementation andoperation record of its technical effectiveness.

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ADB Support for JCM (Sovereign)
ADB
Ordinary capital
resources

Host Country(gov’t, SOE, etc)

loan

Asian Development Fund

EE/RE projects
applying JCM

JFJCM

incremental costgrant JFJCM provides grant for incremental cost of advanced low-carbon
technologies
 Amount of grant, maximum of:i. 10% of the project cost (maximum is $10 million)ii. $5 million if the project cost < $50 million
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ADB Support for JCM (Non-sovereign)
ADB
PrivateSectorOperations

Project Owner(host country)loan

EE/RE projects
applying JCMJFJCM
interest subsidy

 JFJCM provides interest subsidy to ADB’s loan to EE/RE projects
applying JCM
 Amount of interest subsidy:
10% of project cost (maximum is $10 million)

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Interest Subsidy under the JFJCM (Example)
Assumptions of ADB loan
 Loan amount: $50 million
 Interest rate: 5% (base case)  3% (with JFJCM support)
 Repayment: 15-year amortization
Base caseWith JFJCM Support

total interest payment: $18.8 million

total interest payment: $11.3 million
JFJCM interest subsidy: $7.5 million

2.5

2.5

2.0

2.01.5

1.5

1.0

1.0

0.5

0.5

0.0

0.0
12345678

9 10 11 12 13 14 15182345678

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Important Requirements
 Financing considered and processed by the PSOD
 Contribution to development goals of host country Technical feasibility, financial and economic viability of project Operational experience, track record and institutional capacity ofproject developer Use of advanced low-carbon technologies with: clear and long-term GHG emission reductions
 possibility of robust MRV
 Cost effectiveness* cost of reducing 1tCO2e ≤ $40* grant amount / (annual GHG emission reduction x project period)

9Other Requirements: JCM Application
JCM Application
 Preparation and approval of JCM Methodology, if necessary
 Preparation of Project Design Documents (PDD)
 Validation by Third Party Entities (TPEs), and registration ofthe project Monitoring, reporting and verification of GHG emission
reduction;
 Issuance of the JCM credits and delivery to government(s)ADB
 Fund or technical assistance (TA) may support methodology andPDD preparation
 Fund or TA may support TPE costs for validation and verification
10Relevant ADB Departments for JFJCM Projects
ADBOperation Departments
 Southeast Asia Department
 South Asia Department ...
 Private Sector Operations Department

Loanprocessing

Knowledge Management and SustainableDevelopment Departments
 Sustainable Development and Climate
Change Department
 …

Other Departments
 …
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JFJCM
management

Bothdepartments
work together
for JFJCM
projects

Contact us

Hiroaki Teshima
Environment Specialist / JFJCM Fund manager
Sustainable Development and Climate Change Department
Asian Development Bank
Tel +63 2 632 4287
hteshima@adb.org

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