UN Carbon Markets Powering Green Energy Growth in Africa
But Continent Still Lagging Far Behind Asia and Latin America
Green Electricity Conference to be Held in Nairobi, 23-24 November
Nairobi, 17 November 2009 - A rising number of green energy and climate-friendly projects are up and running or being planned across Africa new figures show.
The projects, from renewable energies to tree planting, are emerging as part of the Clean Development Mechanism (CDM) of the Kyoto Protocol-the United Nation's emission reduction treaty.
Latest figures compiled by the UN Environment Programme (UNEP) indicate that a total of 112 CDM Africa projects are at 'validation, requesting registration or registered" worth a total of Euros 212 million a year.
This is up from 78 projects in 2008 and just two in 2004. Kenya's total is 14, rising from five in 2008 and zero in 2004.
While the figures are cause for optimism, they also underline how few projects are currently flowing into Africa when compared with several other parts of the world.
Globally there are over 4,730 CDM projects operating or close to approval. The lion's share is in Asia Pacific with a total of just over 3,700 projects followed by Latin America and the Caribbean with close to 820.
The news comes as the Kenya government, AFD-the French development agency and UNEP announced the Green Electricity Conference to take place in Nairobi on the 23 and 24 of November.
Experts say the new figures underline the importance of Africa's governments pressing for reform of the CDM in the days and weeks before the crucial UN climate convention meeting in Copenhagen.
They also underscore the need for governments to support smart market mechanisms in order to manage some of the special kinds of risk that might be holding back such projects in Africa.
Late last month, governments, investors and experts met in South Africa under UNEP's Finance Initiative to specifically assess ways of boosting green energy uptake on the Continent.
Several recommendations, based on partnerships between the public and private sectors, were made including:-
- Country risk cover - Insurance against country risk - i.e. risk of expropriation, breach of contract, war and civil disturbance - should be expanded and explicitly provided to support low carbon funds.
- Low-carbon policy risk cover - Insurance should be provided where countries renege on policy frameworks / incentive schemes that are underpinning low-carbon investments, e.g. emissions trading, renewable energy support mechanisms.
- Funds to hedge currency risk - Public finance could provide currency funds which offer cost-effective hedges for local currencies which would otherwise not be available in the commercial foreign exchange markets.
- Improving deal flow - In order to provide a series of easily executable, commercially attractive projects, vehicles specializing in early-stage low carbon projects could be developed, and technical assistance could be provided to increase demand.
- Public sector taking subordinated equity positions in funds - the public sector could invest directly in low carbon funds via "first loss equity", thereby improving the overall risk-return profile of such vehicles.
Africa CDM Data in Detail
Today's CDM up date has been compiled by experts at the UNEP Risoe centre in Denmark.
CDM projects offer a way of developed countries reducing emissions and meeting global warming commitments by investing in carbon reduction projects in developing countries.
- A total of 23 countries in Africa are now participating in the CDM
- Just over 20 per cent of the projects are in North Africa with Egypt having the most (13 projects or 12 per cent of the Africa total), followed by Morocco with ten.
- Just under 80 per cent are in sub-Saharan Africa with South Africa having 28 projects in the pipeline or up and running followed by Kenya with 14; Uganda, 10 per cent and Nigeria, six per cent.
- Generating electricity from landfills using the waste methane gas tops the list with 20 projects representing 18 per cent of the total Continent-wide.
- There are eight wind power; three solar and two geothermal projects representing 12 per cent of all Africa CDM projects.
- Reforestation projects number 17 representing 15 per cent of projects.
- By 2012, a total of 260 Africa CDM projects could be operating or under approval
- Assuming a price of 10 Euros per ton of C02, this could worth to Africa Euro 500 million a year by 2012.
- Some of the new projects that have been submitted for approval include a 6.6 MW 'run of river' hydro project in western Uganda and a rural electrification one using photovoltaic solar power in Tunisia.
- Others include a landfill gas project in Mauritius and a 25MW energy efficiency project at a sugar mill in Senegal.
The CDM up date for Africa also underlines some other positive developments. Experts claim that one of the reasons why some of the larger developing economies have secured more CDM investment is that they can offer bigger projects representing larger emission reductions for developed economies.
One solution is known as the programmatic CDM whereby many smaller projects are bundled into one large project.
Over the past 12 months several programmatic ones involving Africa have been submitted to the CDM board for approval.
These include two large solar water heating projects in South Africa; the promotion of energy efficient light bulbs in rural Senegal and a municipal waste composting project in Uganda.
An estimated one third of programmatic CDM projects involved the Continent.
Notes to Editors:
The Green Electricity Conference Green Electricity Conference:
Powering Kenya into a Green Energy Future, will take place at the Nairobi Hilton Hotel between 23-24 November 2009
UNEP Risoe CDM Pipeline www.cdmpipeline.org
For More information please Contact Nick Nuttall, UNEP Spokesperson/Head of Media, on Tel: 0733 632755 or e-mail: email@example.com