WASHINGTON, June 6, 2006—
The Netherlands’ Ministry of Housing, Spatial Planning, and the Environment (VROM) agreed today with the International Finance Corporation, the private arm of the World Bank Group, to provide additional funding of 45 million euros ($57 million) to the IFC-Netherlands Carbon Facility, also known as INCaF. Through this facility, IFC will purchase Certified Emission Reductions (CERs) – for the benefit of the Dutch government - from projects in developing countries that qualify under the Kyoto Protocol’s Clean Development Mechanism (CDM). The Dutch government will use reductions purchased through the facility to comply with its commitment under the protocol.
“With this initiative, IFC continues to support a mechanism that generates both environmental benefits and revenues for the private sector in developing countries,” said
Lars Thunell, IFC’s Executive Vice President. “IFC is pleased to enhance its cooperation with the government of the Netherlands. This type of cooperation is also allowing us to develop a range of innovative financial products for the carbon market, which can help unlock the value of carbon assets for our developing country clients."
Pieter van Geel, State Secretary for Housing, Spatial Planning, and the Environment said,
“The additional funding will also allow the Netherlands to increase its CDM activities in the People’s Republic of China, where greenhouse gas emissions are increasing rapidly. It is important to help China with energy saving and sustainable energy projects. We were already involved in the first ever CDM-project in China, and with the IFC on our side, we will strengthen our position on the country’s CDM market.”
In January 2002, IFC and the Netherlands created INCaF with an initial funding of 44 million euros, which was later increased to 55 million euros. The funding announced today brings the facility’s total financing to 100 million euros. Funds are used to buy carbon credits from projects such as renewable energy (including wind, hydro, and biomass power), energy efficiency improvements, recovery and utilization of methane from landfills, and switching of fuels to less carbon-intensive sources, and capture and destruction of industrial gases that are potent greenhouse gases (GHGs). The new funding will give preference to projects in China, and it will encourage companies there to access the GHG emission reductions market and generate added revenues by adopting cleaner technologies.
To date, IFC has signed contracts with four sellers under INCaF, and it intends to sign a few more in the coming months. Separately, IFC is also developing and offering several financial products for the growing carbon market, including an AAA-rated carbon delivery guarantee on behalf of projects generating emission reductions, as well as loans against future carbon revenues.
The new agreement with IFC will allow VROM to gain experience in bilateral cooperation on the Clean Development Mechanism.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
