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Growth of UNEP Seed Funding Initiative Signals Confidence in Africa's Green Economy

Nairobi, 4 June 2012 – In a boost to Africa's carbon market, the African Carbon Asset Development (ACAD) Facility—an incubator for developing carbon projects steered by the United Nations Environment Programme (UNEP) —has announced expansion plans.

Based on the resounding success of its first phase, under which 14 projects in 9 countries were provided with seed funding, the German Government's International Climate Initiative, is providing ACAD with further funding for phase two.

At the time of release, the French Government was also finalizing negotiations for a large contribution toward the Facility's scale-up through the French Global Environment Facility administered by the Agence Française de Développement.

The carbon market initiative intends to support at least twenty more projects in Africa by the end of 2013, and to augment local financial capacity to invest in green projects.

To this end, ACAD has launched a fresh call for projects as well as for new financial partners. This will be in addition to Standard Bank, who has re-enlisted in the public-private partnership, reaffirming a commitment to the sector by helping to channel seed capital to highly replicable projects and business models.

"UNEP is pleased to announce the expansion of ACAD, and recognizes that much work still needs to be done to help African green entrepreneurs access carbon finance," says Sylvie Lemmet, Director of UNEP's Division of Technology, Industry and Economics.

"We are thrilled to have helped not only bring good projects to fruition, but also to have supported the African financial sector evaluate the potential of innovative carbon projects. These latest developments suggest a strong vote of confidence in ACAD and signal Africa's emergence as a fully-fledged carbon market player", added Ms. Lemmet.

Examples of ACAD project successes include the first large-scale wind power project in Africa to be registered under the U.N. carbon credit scheme, a program allowing multiple individual small-scale hydropower projects in East Africa to access carbon revenues, and a microfinance-backed business franchise distributing kerosene-replacing LED lights to Rwandan households.

ACAD's model has proved so effective that it was cited as one of the best-practice precursors for a new revolving loan facility for CDM projects, which was adopted at the UN Climate Change Conference (COP-17) in Durban last year. John Christensen, head of UNEP's Risoe Center, announced last month that the new CDM Loan Scheme which would be co-administered by UNEP Risoe in partnership with the United Nations Office for Project Services (UNOPS), building upon its pivotal experience with ACAD. The seed funding offered by both facilities comes at an opportune time when Africa's share of the market is on the ascendant.

"Africa has not played a significant role in the CDM up until now. Facilities such as ACAD are imperative to help the continent reach its potential," says Margaret Mukahanana, an environmental policymaker from Zimbabwe and CDM Policy Dialogue panel member.

"Governments also have a role to play. For example, in an effort to channel more carbon finance to some of the world poorest countries, the EU has ruled that new CDM projects from 2013 onwards must be hosted in a least developed country (LDC) in order to ensure that their credits are eligible for use in the EU scheme. Of the 48 countries that now make up LDCs, some 33 are in Africa. While this initiative is of merit in principle, one must not forget that the need and the opportunity for Africa's green economy spans the entire continent. Projects like ACAD which recognize and support this, are the ideal," added Ms. Mukahanana.

Given its focus on trade and infrastructure development, regional integration, and the sustainability of its natural resources, Africa is poised to be a highly attractive market for the global carbon sector and to play vital role in the burgeoning green economy, according to ACAD.

Guido Schmidt-Traub from CDC Climate Asset Management concurs, concluding, "ACAD is a tried and tested model for helping more projects in Africa get off the ground. Since these projects can then attract commercial funding, ACAD is poised to have a substantial multiplier effect for clean energy projects across the continent. As an investor focusing on Africa, we are therefore pleased to see ACAD expand."

More information is on ACAD is available at: www.acadfacility.org

Notes to Editors

About ACAD

ACAD is Africa's first project development support facility dedicated to increasing carbon project deal-flow. Its approach to market and capacity development is innovative because it is practical, investment-project specific, flexible, as well as demand-driven. Examples of ACAD project successes include the first large-scale wind power project in Africa to be registered under the CDM and the first registered CDM program of Activity involving kerosene replacing efficient lamps in Rwanda.

About UNEP and UNEP Risoe Center:

UNEP is the United Nations system's designated entity for addressing environmental issues at the global and regional level. In the area of climate change, UNEP's approach aims at reducing barriers to market development and easing the costs and risks of entry of new actors in both the public and private sector. The UNEP Risoe Centre on Energy, Climate and Sustainable Development is leading UNEP activities related to carbon finance and the Clean Development Mechanism (CDM). URC has played a pivotal role in facilitating the participation of developing countries in the emerging carbon market, focusing on support for capacity building, and piloting new approaches. It conducts analysis to strengthen emerging sectors in CDM, and implements country-level and regional activities aimed at enhancing a more equitable regional distribution of carbon project activities.

For further information visit: www.unep.org/climatechange or www.uneprisoe.org

The CDM Loan Scheme, which is funded through the CDM Trust Fund, was adopted by a decision of the Conference of the Parties to the UNFCCC at its 17th meeting in Durban in December 2011. Under the scheme, projects located in poor countries and those with fewer than 10 registered CDM projects will be eligible for interest-free repayable loans for their documentation and auditing costs. The ACAD Facility was cited in the report of the CDM Executive Board (CDM EB report 54) to the COP which analyzed and recommended operational

models and good practice for channeling seed funding to carbon investment projects in underserved countries. For further information visit: www.cdmloanscheme.org

A Quick Fact Sheet for Journalists on Carbon Markets and Africa is available here

About Germany's International Climate Initiative

The International Climate Change Initiative (ICI) of the German Federal Ministry for the Environment (BMU) promotes projects in developing countries, emerging economies, as well as in countries in transition. Part of the revenues accrued from the auction of emission allowances in Germany are reinvested through the ICI in international climate change activities. Projects are implemented together with different project partners. These activities, such as ACAD, provide important stimulus in negotiations on the international climate regime beyond 2012. ICI funding is given to project proposals that support creating an international climate protection architecture, to transparency, and to innovative and transferable solutions that have an impact beyond the individual project.

For further information visit:



For more information, please contact:

UNEP Newsdesk (Nairobi) on Tel. +254 20 762 3088 or Email unepnewsdesk@unep.org

Glenn Hodes, UNEP Risoe Center on Tel. +27 79 559 9663 Email gsho@dtu.dk

Kim Polley, Africapractice on Tel. +27 82 768 9727 or Email kpolley@africapractice.com

Erik Larsen, Standard Bank on Tel. +27 11 636 7520 or Email Erik.larsen@standardbank.co.za

ACAD supports a business that distributes LED lights to replace kerosene lamps in Rwandan households



Further Resources

Germany's Climate Initiative

German Federal Ministry for the Environment (BMU)


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