Institutional Investors have committed $382 million to the China Methane Recovery Fund (CMRF), according to Man Investments, one of the largest providers of hedge fund investments in the world.
The money will be used to part-fund the development of technology to extract methane gas from coal mines and use it to generate electricity. The final stage of asset-raising for the CMRF will close before the end of the year, with a maximum of a further $164 million sought from institutional investors.
Methane is a potent greenhouse gas and an unfortunate by-product of the mining process. Man Invesments claim that this latest investment could benefit the environment - in line with the Kyoto Protocol - at the same time as earning returns for investors from sales of electricity and carbon credits.
Antoine Massad, Chief Executive Officer of Man Investments Middle East Limited, described the venture as an exciting mix of environmental, social and commercial considerations.
"We are backing this fund because the strategy shows very good return potential," Massad said.
"But equally important is its capacity to significantly benefit the environment by reducing harmful greenhouse gas emissions, and to contribute to China's economic growth through installing much-needed additional electricity generating capacity."
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