Colombo, November 28, 2006 –
The International Finance Corporation, the private sector arm of the World Bank Group, has become the first intermediary to deliver Certified Emission Reductions (CERs) to the government of the Netherlands. The CERs come from Eco Power, which is reducing emissions by displacing fossil fuel-based power generation from Sri Lanka’s national grid with clean renewable energy generated by seven small, run-of-river hydroelectric projects. IFC is one of four entities engaged by the Dutch government to procure carbon credits for meeting its obligations under the Kyoto Protocol.
The IFC-Netherlands Carbon Facility (INCaF), a joint initiative of IFC and the Dutch government, signed an Emissions Reductions Purchase Agreement with Eco Power in August 2005. The bundling is projected to enable Eco Power to sell around 115,000 CERs per year from a small hydro capacity of 31 megawatts.
Iyad Malas, IFC’s Director for South Asia, said, “IFC encourages the emerging markets’ private sector to participate in the carbon market by providing value-added services to project sponsors. As a global investor and advisor committed to developing a sustainable private sector in emerging markets, IFC is well positioned to help project sponsors participate in this new market.”
The Clean Development Mechanism of the Kyoto Protocol has established certified emissions reductions as an asset class that can be traded in global community markets. Eco Power Limited has implemented Clean Development Mechanism projects based on run-of-river hydro generation assets that are displacing fossil fuel–based generation in the Sri Lankan grid (mostly diesel and fuel oil). Shilpa Patel, IFC’s Manager for Sustainability Business Innovation, said, “We are pleased to support the commendable efforts of project developers such as Eco Power in dealing with the challenges posed by climate change.”
Dr. Romesh Dias Bandaranaike, Director of Eco Power, explained, “IFC’s carbon expertise helped us add a new carbon finance revenue stream from a AAA-rated counterparty for our small hydro projects.”
CERs are issued by the United Nations Framework Conference on Climate Change, which must first examine their validity. As the Netherlands’ intermediary, IFC presented the credits for approval to UNFCCC, and upon issuance delivered them to the Dutch government. The government can now officially use the credits to comply with its Kyoto Protocol commitments.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
.
About Eco Power
Eco Power, the seller of these emissions credits, is a leading developer and operator of small-scale hydropower generation plants in Sri Lanka. International Resources Group, a U.S.-based energy and environmental professional services company, undertook the preliminary analysis, prepared the background documentation, facilitated the sale of the CERs, and will continue to assist Eco Power in this transaction.
