Johannesburg/New Delhi, March 17, 2008
— IFC, a member of the World Bank Group, has signed its first carbon delivery
guarantee agreements in Sub-Saharan Africa and South Asia. The new carbon
finance product is expected to give companies selling carbon credits the
chance to access a wider range of potential buyers by mitigating country
and project risk, and it therefore helps to boost the carbon market in
In South Africa, IFC’s agreement covers up to 900,000 carbon credits from
Omnia, one of the country’s leading fertilizer producers. In India, IFC
signed a deal for 850,000 carbon credits from Rain
CII Carbon (India), an IFC client for
over 15 years and now the largest merchant of calcined coke in the world
with production in India and the United States.
Under the new carbon delivery guarantee, IFC facilitates delivery of carbon
credits from companies in developing countries to buyers in developed countries.
IFC acts as an intermediary, selling companies’ credits in the market
and passing an attractive price back to the projects. Clients profit from
IFC’s AAA credit rating by gaining access to markets and benefit from
full price transparency. For buyers in developed countries, IFC also eliminates
the risk of not receiving the promised carbon credits.
“IFC is in a unique position to help clients maximize the benefits of
the carbon credit market, given our experience in the carbon market and
our financial strength,” said IFC Executive Vice President and CEO Lars
Thunell. “We are eager to work with companies in developing countries
who want to undertake climate friendly projects and commercialize carbon
Under the Clean Development Mechanism of the Kyoto Protocol, companies
in developing countries can qualify to sell carbon credits, known as Certified
Emission Reductions, in global commodity markets when they reduce their
output of environmentally harmful substances. The process aims to decouple
economic growth from an increase in the greenhouse gases that cause global
IFC is actively pursing carbon delivery guarantee deals throughout the
developing world. In Rain’s case, the Indian company used IFC financing
to install waste heat recovery facilities that help eliminate its dependence
on fossil fuels for power generation and generate carbon credits as a result.
Omnia’s emission reductions will come from a nitrous oxide destruction
facility that will significantly reduce emissions. Nitrous dioxide and
other greenhouse gases are considered the leading cause of global climate
IFC has been active in the carbon market since 2002, largely through the
IFC-Netherlands Carbon Facility and
the Netherlands European Carbon Facility. IFC
purchases emissions reductions in developing countries on behalf of the
Dutch government, which, in turn, uses the emissions reductions to comply
with its Kyoto Protocol commitment.
The new carbon delivery guarantee is an integral part of IFC’s climate
change strategy, through which IFC helps its clients maximize their potential
for clean energy, including by generating carbon credits.
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC's
vision is that people should have the opportunity to escape poverty and
improve their lives. In FY07, IFC committed $8.2 billion and mobilized
an additional $3.9 billion through syndications and structured finance
for 299 investments in 69 developing countries. IFC also provided advisory
services in 97 countries. For more information, visit www.ifc.org.