Climate Change Capital, the specialist bank, has raised by far the largest private sector fund dedicated to investment in clean energy and reducing greenhouse gas emissions, with Centrica and two blue-chip pension funds among the investors.

The fund has raised $830m (pounds 450m) in just three months and is expected to top $lbn before closing, with investors including two of the world's top five pension funds, ABP and PGGM, both public sector funds in the Netherlands. Most of the money will be invested in the developing world.

It is Climate Change Capital's second fund. The first raised $130m. Only the World Bank has raised more money to put into the low carbon economy.

The new fund also announced its first investment, a move into China, by putting money into a scheme to cut emissions from a chemicals factory. Developing countries such as China do not have limits to the amount of greenhouse gases they produce.

James Cameron, the vice-president of Climate Change Capital, said: "This is further proof that the so-called 'green economy' has arrived, as the world realises that combating global warming is an economic opportunity as well as a necessity.

"The profile of the investors backing this new asset class, created due to the Kyoto Protocol, confirms this, reflecting very real progress in the development of the carbon market."

A new asset class has been created by public policy to tackle climate change. In countries signed up to the Kyoto Protocol, moves to reduce greenhouse gases are rewarded by being issued with carbon credits. These credits can then be used or sold on.

Under the clean development mechanism, credits created in the developing world can be transferred to industrialised nations.

For Centrica, the UK gas supplier, it means access to carbon credits from China that it can use to offset greenhouse gas emissions that are produced by its UK power stations.

Sue Wheeler, Centrica's head of new energy, said: "Centrica believes project credits like these are a vital step towards global engagement in reducing carbon emissions. Projects developed under the clean development mechanism deliver real and enduring carbon emissions reductions and, in the absence of legally binding targets, open a path way to Kyoto for many developing countries."

It is Centrica's first investment of its kind, though the company did not disclose how much money it put in. Centrica runs seven large power stations which, together with its off-shore installations, produced 6.4 million tonnes of carbon dioxide last year.