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EU Funds Cleantech Projects, Approves Masdar Grant

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As the UN climate change talks continue in Poland, the European Commission announced today that it’s picked the first set of investments for its Global Energy Efficiency and Renewable Energy Fund. This first round will funnel €22 million ($29.3 million) into small-scale renewable energy projects in developing countries in Africa and Asia.

The very well-funded thin-film solar firm Masdar PV also picked up some funding today, with the European Commission approving €28 million in aid from Germany. Masdar PV is backed by oil-rich Abu Dhabi’s Masdar Initiative.

The €22 million of the Global Energy Efficiency and Renewable Energy Fund, meanwhile, will be invested in two regional funds, one focused on projects in sub-Saharan and southern Africa, the other in Asia with a focus on India. The commission said regional projects including wind power, small hydro, biomass and methane recovery will get financing.

According to the commission, 1.6 billion people worldwide do not have access to reliable energy services. The EU hopes to help change that with its global fund, which has received €110 million in commitments from the European Commission, Germany and Norway through 2011. The fund is targeted at investments under €10 million, which the commission said are mostly ignored by private investors and international finance institutions. In addition to Africa and Asia, the fund is looking at projects in the Caribbean, the Pacific, Latin America, and non-EU Eastern Europe.

Masdar, which announced earlier this year that it would put $2 billion into manufacturing thin-film photovoltaic solar modules, is getting a break on some of that cash from the German government with the €28 million in regional investment aid. Germany needed to get authorization from the European Commission for the grant under EU rules.

Masdar PV is setting up a €143 million thin-film solar module factory in Germany, with the project expected to create at least 184 new jobs. The Abu Dhabi-backed group, which is also putting up a solar factory in its home country, has already made at least one distribution deal for its planned solar modules, with Germany’s Colexon announcing earlier this week that it signed a strategic partnership with Masdar PV for more than 150 megawatts of solar modules. That contract runs until 2013.

Masdar PV’s first production site in Erfut, Germany, is expected to start operations in the third quarter of 2009, with the Abu Dhabi factory going on-line in the second quarter of 2010. The company said both sites will initially reach a total production capacity of 210 MW per year.