NEFCO and Macquarie Bank Limited invest in Russian fuel switch project

London/Helsinki, 3 July 2009, The Nordic Environment Finance Corporation (NEFCO) and Macquarie Bank Limited (Macquarie) have signed a contract for the transaction of Emission Reduction Units (ERUs) arising from the switch from coal to natural gas in the district heating system of the Russian resort town of Belokurikha.

The project is implemented as a Joint Implementation (JI) project under the Kyoto Protocol. Joint Implementation enables project activities that reduce greenhouse gas emissions to earn tradable Emission Reduction Units against independently verified emission reductions. The project’s Emission Reduction Units will be used by Nordic and German public and private investors of the Baltic Sea Region Testing Ground Facility (TGF) towards compliance under the Kyoto Protocol and the EU Emissions Trading Scheme.  The project has been submitted to the Russian government for approval under the domestic approval mechanism in Russia.  
 

“NEFCO is pleased to be associated with this project through our TGF Carbon Fund. It fulfils the mandate of the TGF perfectly, promoting fuel switching away from coal and enhancing energy efficiency, with important economic and social dimensions as well as global and local emission reductions in this remote location of Russia", says Ash Sharma, Head of Carbon Finance and Funds at NEFCO.

“Macquarie has worked in partnership with NEFCO to achieve the objectives of their carbon procurement fund. We look forward to managing the project’s progress together and to explore further opportunities for cooperation,“ said John Marlow, Head of Environmental Products within Macquarie's Treasury and Commodities Group.

For more information, please contact:
Ash Sharma, Senior Investment Manager, NEFCO, +358 400 811 327
Hanna-Mari Ahonen, Project Manager, NEFCO, +358 50 311 1043
Gavin Winbanks, Corporate Communications, Macquarie Group, +44 203 037 5944

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NEFCO is an international financial institution owned by the five Nordic countries. NEFCO has been the Fund Manager of the The Baltic Sea Region Testing Ground Facility (TGF) since 2003. TGF is a regional carbon fund based on a Public Private Partnership model. It was set up as an instrument for purchasing greenhouse gas emission reductions under the joint implementation (JI) mechanism in the Baltic Sea Region, under the auspices of the multilateral energy cooperation, BASREC (www.basrec.org).  The fund is capitalised at €35 million.

Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services.  Founded in 1969, Macquarie operates in more than 70 office locations in 26 countries. Macquarie has been an active Kyoto Protocol project originator in Russia since 2007 and offers services including property structured finance advisory, corporate finance advisory and market research.  Macquarie’s Environmental Financial Products team has a strong presence across Asia, Europe, the US and Australia, and is pursuing and executing emissions-related transactions and investments across these regions.