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EBRD-EIB carbon fund helps eastern Europe realise full potential
12 participants commit €165 million to buy carbon credits
The supply of carbon credits across countries from Central Europe to Central
Asia will be increased significantly under the EBRD-EIB Multilateral Carbon
Credit Fund, which became active today with a commitment of €165 million from
six countries and six companies. It is the only carbon fund dedicated
specifically to this region.
The inefficient use of energy, a legacy of the region’s command economy past,
means these countries have huge potential for cost effective reduction of
greenhouse gas emissions – responsible for global warming – through energy
efficiency improvements. The region currently contributes around 13 per cent
of global carbon emissions, yet it generates just 3 per cent of global carbon
credits, created when projects reduce or avoid greenhouse gas emissions. The
potential is much higher, at about 20 per cent. Under the Kyoto Protocol
carbon credits can be traded between buyers and sellers.
By joining the MCCF, countries – which must be a shareholder of either the
EBRD or EIB – and companies can buy carbon credits from emission reduction
projects financed by either institution. In addition to the MCCF, which is
fully subscribed, sovereign participants can also participate via the MCCF in
Green Investment Schemes, which are innovative ways of facilitating trade in
carbon credits between governments whereby trade revenues are used to support
investments in more climate friendly projects in the selling country.
Speaking at the first MCCF assembly meeting in London, EBRD President Jean
Lemierre said the region has huge potential to address the issues of climate
change and energy security, which are two themes that dominate the global
agenda. The EBRD is helping the region to realise this potential by financing
the efficient use of energy that will cut demand and imports, and also reduce
pollution and adverse climate change, said Mr Lemierre. The by-product of
these actions are carbon credits, which have financial benefits for those
generating the credits and at the same time help MCCF participants meet their
own Kyoto targets, he added.
Simon Brooks, Vice-President of the EIB, said that it is now clear to the
international community that sustainable economic growth and development
require determination and market-based action to bring about tangible and
rapid results. The EU policy on environmental improvements is providing
leadership and concrete support to countries and businesses eager to ensure a
better future worldwide. MCCF is an important step in this direction and a
solid foundation for extended cooperation among committed parties in other
regions as well.
Typical projects under the MCCF will include industrial energy efficiency,
power plant and district heating renovation, renewable energy (for example,
biomass, wind and mini-hydro) and landfill gas extraction and utilisation
projects across all 29 EBRD countries of operations, where the EIB also works
extensively.
Fund participants include: Belgium (on behalf of Flanders), Finland, Ireland,
Luxembourg, Spain, Sweden, and six private participants: Abengoa (Spain), ČEZ
(Czech Republic), Gas Natural (Spain), Endesa (Spain), PPC (Greece), and Union
Fenosa (Spain).
The negotiation, contracting and monitoring of carbon credit transactions will
be outsourced to private “Carbon Managers” selected by a competitive process.
A key strength of the MCCF is that the projects from which carbon credits will
be sourced will be financed and appraised by either institution – or both, if
projects are co-financed – in line with standard requirements for project
viability and sustainability, integrity and corporate governance.
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The EBRD, owned by 61 countries and two intergovernmental institutions, aims
to foster the transition from centrally planned to market economies in
countries from central Europe to Central Asia.
The European Investment Bank (EIB) is the financing institution of the
European Union supporting its policies. Established in 1957, it operates
within the 25 EU Members States and in more than 130 countries outside.
Press contacts:
EBRD:
Jazz Singh - see below.
EIB:
Orlando Arango
Mobile: +32 479 79 14 33
Tel.:
+32 2 235 00 84
Email: o.arango@eib.org
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