The Finnish utility company Vapo Oy invests EUR 10 million in NEFCO Carbon Fund to reduce emissions of carbon dioxide

The Finnish utility company Vapo Oy has invested EUR 10 million into the NEFCO Carbon Fund (NeCF) “Kyoto Plus” Tranche 2 in order to acquire emission reduction units to meet its post 2012-  commitments within the EU’s emissions trading system. Vapo is the leading supplier of local and renewable fuels, bioelectricity and bioheat, and environmental business solutions in the Baltic Sea region. The Finnish state owns 50.1% of Vapo’s shares. Vapo Group’s turnover in 2009 was EUR 573.7 million.

This is Vapo’s second investment in NEFCO’s carbon funds. The company’s prior investment was in Baltic Sea Region Testing Ground Facility (TGF), which is also administered by NEFCO. The Joint Implementation fund was established in 2003, and Vapo joined the private sector tranche 2 of the Facility in April 2006.

Vapo’s investment into the NEFCO Carbon Fund is earmarked to acquire carbon credits after the Kyoto Protocol's first commitment period, which means that emission reduction units will be purchased only from 2013.
 
”With this investment we want to ensure that Vapo meets the emissions targets set for the company for the next commitment period. We believe that this is a cost efficient way of reducing the emissions through a well-known and trustworthy financial institution”, said Group Treasurer Erik Nieminen from Vapo.

NEFCO Carbon Fund (NeCF) procures emission reduction units on behalf of its investors enabling them to meet their commitments under the EU Emission Trading Scheme and the Kyoto Protocol.  The NEFCO Carbon Fund (NeCF), which was established in 2008, has invested in a 100% renewable energy portfolio, primarily in wind and hydro energy projects in Asia and Latin America. 

The NeCF now has access to financial resources of EUR 115.3 million, raised from both sovereign and private sector actors. Replenishment negotiations on raising the fund’s capital under Tranche 2 are underway with various investors. The Finnish utility company EPV Energy announced in November 2010 that it would invest EUR 8 million into the fund. 

Apart from Vapo, DONG Energy, The Danish Energy Agency, The Danish Industrialisation Fund for Developing Countries (IFU), the Norwegian and the Finnish governments, the Finnish energy companies Kymppivoima and EPV Energy and NEFCO have invested in the NEFCO Carbon Fund. 

”We are delighted that the Tranche 2 capital raising for the NEFCO Carbon Fund is progressing. This is a clear indication of trust in the NEFCO Carbon Fund’s ability to source high quality credits to meet the needs of obligated entities under Phase III of the  EU’s emissions trading system”, said NEFCO’s Vice President Ash Sharma. 

For more information, please contact:
Ash Sharma, Vice President, NEFCO, +358 400 811 327
Erik Nieminen, Group Treasurer, Vapo Oy, +358 40 553 6168
Mikael Sjövall, Communications Manager, NEFCO, +358 50 3535 045

NEFCO is an international financial institution owned by the five Nordic countries and mainly finances environmental-related projects and investments in Russia, Ukraine, Estonia, Latvia, Lithuania and Belarus, in order to generate positive environmental effects for the Nordic region. Its Carbon Finance and Funds Unit operates globally, and has assets under management exceeding EUR 170 million. www.nefco.org/cff

Vapo is the leading supplier of local and renewable fuels, bioelectricity and bioheat, and environmental business solutions in the Baltic Sea region. The Group has five business areas: Local Fuels, Heat and Power, Pellets, Garden and Environment, and Vapo Timber Oy. The parent company Vapo Oy is owned by the Finnish State (50.1%) and Suomen Energiavarat Oy (49.9%). Vapo Group’s turnover in 2009 was EUR 573.7 million. The Group had 1,451 employees.