The Permanent Secretariat of the SAARC Development Fund (SDF), established in Colombo, Sri Lanka at the previous 15th Summit, was officially inaugurated yesterday at the 16th SAARC Summit in Thimphu, Bhutan.

The initial capital was $ 300 million to support socio-economic projects in the region.

China serving as an observer for SAARC, pledged USD 300,000 as an initial contribution.

China hopes to elevate friendly ties with the bloc to a new level, the Chinese Vice Foreign Minister, Wang Guangya said.

"China stands together with all the other developing countries including countries in South Asia, in firmly upholding our common interest," quoting him, CRI reported.

China will also be hosting the 3rd South Asian Countries Commodity Fair and China-SAARC Senior Officials' Meeting and the 5th China-South Asia Business Forum.

"China is ready to strengthen practical cooperation with South Asian countries on climate change through bilateral channels and within the framework of South-South Cooperation," Wang further stated.

Meanwhile, India announced setting up of a fund that would help South Asia effectively meet urgent adaptation and capacity building needs posed by the climate change and also proposed establishment of innovation centres in the region to develop sustainable energy technologies, the Hindu reported.

“I am happy to announce the setting up of an ‘India Endowment for Climate Change in South Asia’ to help member states in meeting urgent adaptation and capacity building needs,” stated Prime Minister Manmohan Singh.

He also proposed setting up of climate innovation centres in South Asia to develop sustainable energy technologies based on indigenous resource endowments and welcomed the conclusion of the SAARC Convention on Cooperation on environment.

Noting that India has already launched a national mission in sustaining the Himalayan ecosystem, the Prime Minister said the initiative could serve as a nucleus for regional cooperation in this vital area, the Hindu reported.

The SAARC leaders will pitch for observer status to the bloc at the Mexico conference on global warming later this year, IANS reported.

This will enable the eight South Asian nations including Sri Lanka to express their concerns collectively and effectively.