Japan Fund for the Joint Crediting Mechanism

What is the fund?

The Japan Fund for the Joint Crediting Mechanism (JFJCM) is a single donor trust fund established in 2014 and managed by ADB. The fund aims to provide financial incentives for the adoption of advanced low-carbon technologies in ADB-financed and administered sovereign and nonsovereign projects. The fund will provide grants and technical assistance (TA) to ADB projects utilizing the Joint Crediting Mechanism (JCM).

What are the priorities?

The fund seeks to increase the sustainability of ADB-financed and administered projects through the use of advanced low-carbon technologies. The use of JFJCM grants will demonstrate the effectiveness of the JCM and provide a source of additional funding to eligible ADB developing member countries (DMCs). The fund will also offer the opportunity for recipients to engage in projects with strong development characteristics and long-term climate change mitigation benefits. The JFJCM also aims to contribute to the global climate change and development initiatives such as the Paris Agreement and the Sustainable Development Goals.

Who are eligible to access the fund?

All ADB DMCs that have signed bilateral agreements with the Government of Japan under the JCM are eligible to receive support from the fund. As of May 2023, ADB DMCs with bilateral JCM agreements include Azerbaijan, Bangladesh, Cambodia, Georgia, Indonesia, Kazakhstan, the Kyrgyz Republic, the Lao People’s Democratic Republic, Maldives, Mongolia, Palau, Papua New Guinea, the Philippines, Sri Lanka, Thailand, Uzbekistan, and Viet Nam.

• For sovereign investment projects – governments of eligible ADB DMCs, with a JCM bilateral agreement with the Government of Japan at the time of ADB’s review of a JFJCM project proposal.
• For nonsovereign investment projects – borrowers/clients of projects to be implemented in eligible DMCs.
• For TA projects – those included in the first bullet above and ADB DMCs that have initiated discussions with the Government of Japan on the signing of a JCM bilateral agreement.

Projects should meet the following criteria for eligibility:

JCM requirements:

• Defining the JCM methodology.
• Preparation of the project design documents (PDDs).
• Validation by third party entities (TPEs).
• Registration of the project as a JCM project.
• Monitoring and verification of greenhouse gas (GHG) emission reduction.
• Application for issuance of JCM credits and delivery of issued credits to both governments.

Environmental and social impact:

• A reduction of environmental pollution, including air or water pollution, solid waste treatment, or conservation of natural resources; and /or
• Other social and economic benefits, including increased job creation opportunities, better access to basic infrastructure, and gender equality.

What type of projects and technologies will be eligible to access the fund?

The fund aims to support ADB-financed and administered projects which adopt advanced low-carbon technology that can reduce GHG emissions and can contribute to decarbonization of each DMC, with the priority on long-term carbon dioxide reduction from energy-related activities. The fund will also use its resources to provide technical support to recipients in meeting the requirements of the JCM.

The advanced low-carbon technology used by the project must have a proven implementation and operation record in relation to its technical effectiveness. Also, the project's GHG emission reduction capacity must have been established. Technologies in any sector are applicable as long as they meet the above criteria.

Who supports the grant?

The Government of Japan supports this fund. As of July 2023, Japan’s cumulative contribution to the fund since its inception in June 2014 amounted to ¥13.86 billion ($118.77 million equivalent). This includes the first additional contribution dedicated for methane emission reductions, which amounted to $2.30 million.