The African Carbon Asset Development (ACAD) Facility – an incubator for developing carbon projects steered by UNEP – announced new expansion plans on 1 June 2012. Based on the success of its first phase, under which 14 projects in 9 countries were provided with seed funding, the German government’s International Climate Initiative is providing ACAD with further funding for phase two. The French government is also currently finalising negotiations for a large contribution towards the facility’s scale-up.
Some of the successful ACAD projects include the first large-scale wind power project in Africa being registered under the United Nations (UN) carbon credit scheme, a CDM programme of activity allowing multiple individual small-scale hydropower projects in East Africa to access carbon revenues, and a carbon plus microfinance-backed business franchise distributing kerosene-replacing LED lights to Rwandan households.
The carbon market initiative intends to support at least 20 more projects in Africa by the end of 2013. ACAD recently launched a call for projects as well as new financial partners in order to augment local financial capacity to invest in green projects.
Sylvie Lemmet, director of UNEP’s Division of Technology, Industry and Economics, said the organisation is very pleased to be able to announce the expansion of ACAD.
“We are thrilled to have helped to not only bring good projects to fruition, but also to have supported the African financial sector in evaluating the potential of innovative carbon projects. These latest developments suggest a strong vote of confidence in ACAD and signal Africa’s emergence as a fully-fledged carbon market player,” said Lemmet.
During the UN Climate Change Conference (COP17) in Durban last year, ACAD’s model was cited as one of the best-practice precursors for a new revolving loan facility for CDM projects.
“Africa has not played a significant role in the CDM until now. Facilities such as ACAD are imperative to help the continent reach its potential,” says Margaret Mukahanana, an environmental policymaker from Zimbabwe and CDM Policy Dialogue panel member.
In an effort to channel more carbon finance to some of the world’s poorest countries, the EU has ruled that the new CDM projects from 2013 onwards must be hosted in a least developed country (LDC) in order to ensure that their credits are eligible for use in the EU scheme. Of the 48 countries that now make up LDCs, some 33 are in Africa.
“While this initiative is of merit in principle, one must not forget that the need and the opportunity for Africa’s green economy spans the entire continent. Projects like ACAD, which recognises and supports this, are the ideal,” added Mukahanana.
Guido Schmidt-Traub from CDC Climate Asset Management says Africa is poised to be a highly attractive market for the global carbon sector and to play a vital role in the burgeoning green economy, according to ACAD.
“ACAD is a tried and tested model for helping more projects in Africa to get off the ground. Since these projects can attract commercial funding, ACAD is poised to have a substantial multiplier effect for clean energy projects across the continent. As an investor focusing on Africa, we are therefore pleased to see ACAD expand,” concludes Schmidt-Traub.
For more information, visit http://www.acadfacility.org/, to which full thanks and acknowledgement is given.