IFC signs Carbon Emission Purchase Agreement in India
New Delhi, June 29 (UNI) The IFC-Netherlands carbon facility, a joint initiative of the IFC, the private sector arm of the World Bank Group, and the Dutch government, today signed an emissions reduction purchase agreement with India worth more than 6 million dollars.
Under this agreement, the International Finance Corporation (IFC) will use Dutch government funds to purchase greenhouse gas emission reductions from windfarms in the Indian states of Rajasthan and Karnataka.
These farms, aggregating 75MW, are connected to state electricity grids. In accordance with the Clean Development Mechanism of the Kyoto Protocol, the Dutch government will then use the purchased Certified Emission Reductions or CERs, to help comply with its commitment under the Protocol.
IFC Environment and Social Development Department Director Rachel Kyte said, ''This transaction enables small and medium sized wind projects to successfully access the commercial carbon finance market and improve returns on risk capital. We hope that this transaction will have a significant demonstration effect on other small and medium sized renewable energy projects across key markets.'' CERs are independently verified reductions of carbon dioxide, methane, and other greenhouse gas emissions in developing countries.
Under the Clean Development Mechanism, they are eligible for trade and can be sold in countries, which have undertaken greenhouse gas emission reductions.
The project is managed by Enercon India Limited, a leading manufacturer of wind turbines and a subsidiary of Enercon Gmbh.
Enercon uses a gearless technology, which increases the life and reliability of turbines. Enercon has been active in the manufacturing, installation, operation, and maintenance of wind turbines in India since 1995, with installations across seven Indian states. To facilitate investments in the wind energy sector in India, Enercon acts as a project developer anchoring all stages of a project.
In addition to bridging demand-supply shortages, wind energy improves the voltage and frequency profile at the interconnect point and has low transmission losses as it is consumed close to the generation point. Revenue from sale of Certified Emissions Reductions improves returns for shareholders and helps improve servicing of debt to lenders.
IFC manages two carbon purchase facilities and offers several financial products for the growing carbon market including an AAA-rated carbon delivery guarantee on behalf of projects generating emission reductions and loans against forward contracts.
In India, IFC's current held portfolio is 1.2 billion dollars, making it IFC's second largest country of operations. In the 2005 fiscal alone, IFC committed 413 million dollars in new investments in India.
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