Projects Selected for New Facility to Boost African Carbon Market
Standard Bank and UNEP collaborate on the Africa Carbon Asset Development (ACAD) Facility
Johannesburg, March 3, 2010 - Project developers, bankers and others setting up carbon projects as part of the fight against climate change have a new place to go for help. ACAD, the first facility dedicated to boosting the African carbon market, has launched by awarding several new grants.
The Facility is a partnership between the United Nations Environment Programme (UNEP), Standard Bank and the German Government's International Climate Initiative, administered by its Federal Environment Ministry. ACAD supports African carbon projects through a combination of technical assistance, grants and preferential access to corporate finance and transactional guidance.
One of the key challenges Africa faces is in removing investment barriers to low-carbon sustainable development. Combined with traditional debt or equity finance, carbon finance is a promising means of attracting funding for energy and infrastructure projects; and it is here that ACAD can help.
ACAD takes a new approach toward capacity and market development, sharing costs and risks with African banks such as Standard Bank to realize and replicate projects.
"Huge investments, especially in Africa, will be needed if we are to minimize the effects of climate change," said Sylvie Lemmet, Director of UNEP's Paris-based Division of Technology, Industry and Economics. "Government investment alone will not be enough. ACAD is a good example of how we can attract much-needed private capital for investments that address climate change."
The ACAD partnership couples UNEP's longstanding capacity building expertise in environmental policy and finance with the financial know-how and regional reach of Standard Bank. "We are keen to bring our global experience on carbon finance back to our roots in Africa and to combine it with the leading technical expertise of UNEP and its Risoe Center," said Geoff Sinclair, Head of Carbon Sales and Trading at Standard Bank. "Our objective is to collaborate with local companies and investors to bring Africa to the forefront of the carbon markets and we look forward to working with everyone to achieve this."
ACAD has recently awarded its first grants to innovative "green" development projects in Kenya, Nigeria and South Africa. These include:
? The Lake Turkana Wind Power Project in Kenya, one of the largest renewable energy generation projects on the African continent to have achieved financial closure. ACAD will provide partial payment for validation costs under the Clean Development Mechanism?the U.N. carbon credit scheme; and
? The Lagos Waste Management Authority in Nigeria which is developing several waste-to-energy sites. ACAD is supporting the costs of engineering and carbon auditing studies required to earn carbon credits.
Another ACAD beneficiary is the Athi River Mining (ARM) Company Ltd., which operates a cement plant in Kenya and is attempting to reduce coal consumption in a cement plant by using locally available biomass resources. "As we are continuously working to improve our environmental footprint, Athi River Mining appreciates the technical and financial support provided by the new ACAD Facility to get this project off the ground. We will look to the lessons of this project for further energy and cost savings across the company," says Mr. Pradeep Paunrana, Managing Director of ARM.