NEFCO Carbon Fund extends renewable energy portfolio in South East Asia

The Nordic Environment Finance Corporation announces that its NEFCO Carbon Fund (NeCF) has signed three long term Agreements to procure certified emission reductions from three small hydro power projects in northern Vietnam. The renewable energy projects will be implemented under the Kyoto Protocol's Clean Development Mechanism (CDM), and will generate predominantly post 2012 credits.

Maija Saijonmaa, a Project Manager with NEFCO’s Carbon Finance and Funds Unit, based in Helsinki described the investments: “The hydro-electric power stations will have a combined installed capacity of 37 MW. The projects are contracted until 2017, utilising the available 7 year crediting period, and are implemented under the Small Scale rules and the approved small-scale methodology AMS-I.D, version 15.” she stated.

In recent years, Vietnam has suffered electricity shortages as a consequence from rapidly increasing demand, thereby imposing negative impacts on economic growth and daily lives of people. As almost 60% of the electricity is generated from fossil fuels, the projects will help reduce emissions. The three separate hydro plants will generate approximately 145 GWh of clean energy, respectively per year leading to estimated combined annual emission reductions of approximately 83,100 tonnes CO2 equivalents or 582,000 tonnes CO2 over the crediting period.

The projects are about to enter validation with TUV Rheinland. The combined capital investment is equivalent to approximately EUR 4.5 million.

“The NeCF has been working in the ASEAN region since the launch of the Fund in April 2008, and is currently evaluating a number of projects in the region, with an emphasis on renewable energy. The rapidly growing economies of South East Asia offer significant opportunities for expansion of clean energy provision, in which CDM and successor carbon finance mechanisms can play an important role”, said Ash Sharma who heads the Carbon Finance and Funds Unit at NEFCO.

He also cites the supportive actions of several of the host governments in the region with regard to institutional support for the CDM, particularly as regards post 2012 crediting.

The NEFCO Carbon Fund was launched in March 2008, and started operations in April 2008. To date the fund has 10 signed ERPA contracts, plus a further 6 projects at the Letter of Intent stage. The NeCF currently has access to financial resources of €100 million, raised from both sovereign and private sector actors. The purpose of the facility is to procure high quality carbon credits for compliance purposes under the EU Emission Trading Scheme and the Kyoto Protocol.

For further information, please contact:
Ash Sharma, Senior Investment Manager, Head, Carbon Finance and Funds Unit, NEFCO, + 358 400 811 327 
Maija Saijonmaa, Project Manager, Carbon Finance and Funds Unit, NEFCO, + 358 50 344 5151