Carbon Finance and Opportunities in Africa Patrick Karani BEA International

Situation of CDM and Carbon Markets Today  Low Level of Activities in relation to registration of new projects similar to the initial years of learning curve  Compliance-driven market demand has out- paced voluntary offset demand  Collapse of the CER/EUA, due to global economic melt-down, uncertainty about Kyoto Protocol  Decline of requests correlated to international markets conditions for CER excluding non-LDC in the EU-ETS

Speculation on CDM for possible Carbon Finance  Redefining the role of CDM to attract private investments  Changing stakeholders’ attitude, perception and conception and embrace business approach and funding  Promoting CDM as a transition to full fledged carbon market driven by forces of demand and supply

Carbon Finance Opportunities in Africa Financing Tools (1) Mobilize ConcessionalResources (2) Catalyze PrivateCapital (3) Maximize MarketMechanisms MitigationMeasures Renewable Energy Energy Efficiency Low Carbon Path Transport Policy & LULUCF Application of Efficiency Systems Urban Sanitation Methane AdaptationMeasures Vulnerability risks into development strategies Climate resilience of vulnerable sectors Climate proofing projects & social dimensions

ISSUES  Countries are installing massive power/thermal capacity with conventional systems  Green technology is expensive  Initial capital is lacking  Banking sector and capital markets not up to speed with green funding  High risks linked to Post Kyoto 2012

Prospects  Carbon credit is becoming a common link in financing  African can generate about 4,000,000 CER per year  More PoA with added CPA will reduce transaction costs per activity and increase volumes of CER from Africa

Carbon Financing for Revenue Certainty  Carbon financing can be defined as financial resources provided to projects generating (or expected to generate) green house gas emission reductions in the form of the purchase of such emission reductions.  In simple term, carbon finance is a purchase contracts whereby one party pays another party in exchange for a given quantity of Green House Gas (GHG) emission reductions. Payment made in different forms to abate GHG EQUITY DEBT/ SOFT LOAN IN KIND CONTRIBUTION FOR TECHNOLOGIES CASH

Way Forward  Reduce capital cost by leveraging carbon investments and promoting trade  Remove Financial and Institutional barriers and provide incentives for private sector participation  Mobilize Resources for Technical Assistance and Build Local Capacity

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