Recently, BusinessGreen reported about a new UN-backed scheme for interest-free loans for carbon credit projects in Least Developed Countries (LDCs). The purpose of the scheme is to provide financing for carbon offset projects under the Clean Development Mechanism (CDM) both in LDCs and in underrepresented countries with fewer than ten CDM-registered projects. This is likely to boost carbon investments in those countries, which so far have struggled to access the carbon financing which the CDM can potentially deliver.
One of the problems related to the CDM carbon credit projects in general is the cost for registering such projects for CDM approval and auditing those projects down the track so as to ensure that they deliver the promised carbon emission reductions. With the interest-free loan scheme on the other hand, projects will receive financing for the CDM validation, registration and verification process. This financing will reduce the cost of CDM carbon credit projects in the LDCs and will help those countries benefit from carbon investments and carbon trading. As John Kilani, Manager of Sustainable Development Mechanisms for the UNFCCC, points out, the loan scheme is likely to contribute to the active participation of Africa in the CDM.
Among the criteria that the projects will have to fulfil are a high probability of registration with the UNFCCC and an expectation of generating at least 7,500 CDM carbon credits (Certified Emissions Reductions – CERs) annually for a project located in a LDC and 15,000 CERs annually for non-LDC projects.
To read the full article, visit carboninvestments.co.