The Carbon Finance and Funds (CFF) operations of NEFCO expanded in both volume and scope in 2009, against a backdrop of difficult economic conditions globally and political uncertainty regarding international climate policy.
The NEFCO Carbon Fund (NeCF), now with financial resources exceeding 100 million euro, has been active in sustainable energy investments in Asia and Africa. NEFCO’s pioneering Baltic Sea Region Testing Ground Facility (TGF), a 35-million-euro regional carbon finance facility, concluded its active procurement and entered fund administration phase in 2009.
Both funds are structured as public-private partnerships with investments from governments and private sector utilities and industrial companies and act as compliance vehicles that purchase Certified Emission Reductions (CERs) and Emission Reduction Units (ERUs) from projects that reduce greenhouse gas (GHG) emissions under the Kyoto Protocol.
“The year witnessed good progress by the carbon funds administered by NEFCO, despite a difficult trading environment globally which has affected the financing climate for sustainable energy investments in general, and weaker carbon prices in particular in the first half of 2009”, said Ash Sharma, Head of the Carbon Finance Unit.
Notwithstanding external market constraints, the NEFCO Carbon Fund (NeCF) has seen a high level of project activity throughout the year. The TGF also saw its first deliveries of early credit AAUs and ERUs in this year from the Benaiciai wind project in Lithuania, as well as new project registrations in Lithuania (Track 2), Estonia and Ukraine (Track 1).
In 2009, a new technical assistance fund, the Nordic Climate Facility (NCF) supporting mitigation and adaptation actions for the poorest countries was launched, in association with the Nordic Development Fund (NDF).
The NEFCO Carbon Fund (NeCF), which was established in 2008, expanded its capital base by EUR 24 million. Two notable initiatives undertaken by the fund have been the agreement in Vietnam to purchase emission reduction units from a hydro project in the country and from a project aimed at improving energy efficiency at a cement factory in China.