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UNEP at work

 

Banking on africa’s opportunities

THE PRoBlEM

Despite huge growth in the carbon market (globally, $142 billion in 2010), Africa has seen very little investment from it. The continent has just two per cent of the registered projects in the clean Development Mechanism (cDM) pipeline, and lags behind countries such as china, India and Brazil. This is a worrying trend because carbon fi nance can be an important tool in catalyzing investment in clean energy, which is much needed in a continent where many people do not have access to reliable energy supplies. But there is limited capacity and limited fi nance for these kinds of projects in Africa, and this has resulted in high transaction costs and a limited appetite among investors who may view Africa as a high risk or who may be unaware of the many opportunities that exist in a continent of developing economies.

THE solUTIoN

UNEp set up the African carbon Asset Development facility (AcAD) in 2009. Its aim is to unlock the potential of the African carbon market by helping the African fi nance sector understand how to incorporate carbon fi nance into their day-to-day lending activities and provide training on how to improve the fl ow of fi nance to clean energy investments.

IMPaCTs

Through AcAD, UNEp has provided advanced carbon fi nance training for more than 250 employees of fi nancial institutions through the African Bankers’ carbon finance and Investment forum and regional workshops in Sub-Saharan Africa. Several of the fi nanciers trained now have their own projects in the cDM pipeline and have used the knowledge gained to advance their projects and search for carbon buyers. Also, AcAD has so far provided $229,427 to 15 projects in Africa to help them advance through the cDM project cycle and move towards fi nancial closure. These fi nancial grants contribute to capacity development by helping provide high-profi le role models that other project developers can use as a point of reference. One of the projects supported by AcAD has already been registered and overall, the projects supported will provide greenhouse gas emissions reductions of about 2 million tonnes per year. AcAD has also sponsored the secondment of a senior economist at the Johannesburg headquarters of Standard Bank, one of the largest banks in Africa, building carbon fi nance knowledge within three of the bank’s teams: project fi nance, power and infrastructure, and investment banking. This has allowed for training that is specifi c to the bank’s needs and has helped to increase lending for cDM projects.

sUPPoRT

german federal Ministry of Environment (BMU), through the International climate Initiative. website http://www.acadfacility.com/

Oando Plc, one of Nigeria’s largest energy solutions providers, teamed up with investment fi rm Alitheia Capital on an innovative venture aimed at commercializing liquid petroleum gas (LPG). Alitheia took part in some ACAD carbon fi nance training events and later successfully applied for ACAD grant funding to help it get the project registered as a CDM project and to identify carbon buyers. LPG is a cleaner, more effi cient fuel that can be used in the household to reduce the rate of deforestation and indoor smoke inhalation. In addition, its use will increase the income of local retailers.



Targeting technologies

THE PRoBlEM

Developing countries need access to advanced technologies to adapt to the consequences of a changing climate and yet at the same time achieve better economic growth and social development without adding to their greenhouse gas (gHg) emissions. There are signifi cant barriers to the rapid adoption of such technologies, including high costs, import and export restrictions, inadequate government policies and regulations, and a lack of experience and knowledge to operate and maintain the technologies. All of these can hinder efforts to leverage the investments that would aid in the more rapid diffusion of climate friendly technologies. Hence, developing country parties to the United Nations framework convention on climate change (UNfccc) are encouraged to undertake assessments of country-specifi c technology needs, known as Technology Needs Assessments (TNAs).

THE solUTIoN

Through its Technology Needs Assessments project, launched at the end of 2009, UNEp is helping 36 countries to identify the most urgent and highest impact technologies they need in a changing climate and to analyze the market and trade barriers that prevent them from accessing those technologies. The countries are also looking at their policy, institutional and fi nancial options to overcome these barriers to prepare their National Technology Action plan.

IMPaCTs

with UNEP’s support, regional centres now provide on-site support by visiting countries on demand and have set up an online helpdesk to answer questions, provide information, and facilitate the review of country reports. UNEp has also collaborated with the United Nations Development programme (UNDP) along with other organizations to develop the Climatetechwiki web platform through which finance and energy firms can access information on a broad set of mitigation and adaptation technologies. Some 15 countries have developed the expertise to prepare their Technology Needs Assessment and National Technology Action Plan. Seven countries have already prepared the list of prioritized technologies that they would like to see adopted and are in process of preparing their Technology Action Plans, which will help them implement the identified technologies in their countries. Another 21 countries will be involved in training workshops in 2011. Those 21 countries will benefit from the experiences of countries in the previous round through Tech-action, a web based platform gathering information on ongoing TNA activities. By assisting countries to articulate their technology needs, this project is accelerating the pace and relevance of technology transfer in those countries.

SUPPORT

Global Environment Facility Trust Funds and TMA Norway. www.tech-action.org; www.climatetechwiki.org/

In Senegal, a national project coordinator and two team leaders have been trained to prepare the National Technology Needs Assessment and Technology Action Plan. An institutional framework with significantly enhanced opportunities for stakeholder participation in technology planning has been established. Senegal has reached a consensus on its technology priorities and is now looking at the barriers it faces to acquiring those technologies.