A Joint Implementation (JI) project consisting of six small-scale energy efficiency and renewable energy projects in Bulgaria, contracted by the EBRD for the account of the Netherlands, is now registered in line with Bulgaria’s national approval procedures.
The Bank will purchase Emission Reduction Units (ERUs) from six small-scale projects aggregated into a single project by United Bulgarian Bank (UBB).
This is one of few examples presently available in the carbon market showcasing the possibility to bundle small-scale projects in order to reduce transaction costs and thus enable smaller companies to benefit from carbon finance.
The project will also deliver Assigned Amount Units (AAUs) in respect to emission reductions that have been realised since the project started in 2005.
UBB acts as an agent on behalf of the six sub-projects, which were financed by UBB with the support of the EBRD’s Bulgarian Energy Efficiency and Renewable Energy Credit Line Facility*.
In total, the six projects are expected to cut some 500,000 tonnes of CO2 equivalent by the end of 2012, at which time the Kyoto Protocol commitment period is due to expire. This is roughly equivalent to the amount of emissions produced by 150,000 cars annually.
The Bank’s first such project contracted for the account of the Netherlands involved a number of small-scale hydropower projects along the river Iskar in Bulgaria. This project was approved by the Joint Implementation Supervisory Committee and registered in line with international procedures in June 2008. Carbon credits were first delivered in June 2010.
Earlier this month, the Bank’s Multilateral Carbon Credit Fund, a joint EBRD-EIB initiative, announced its purchase agreement with Ameria Bank under the Clean Development Mechanism, which involves a bundle of small-scale hydropower plants in Georgia.
Experience in this area will be used to scale up wholesale carbon financing mechanisms in the Bank’s countries of operations.
The Netherlands and Denmark provided support in the design of Bulgaria’s national approval procedures, which were adopted in April 2010. Currently all remaining Netherlands Carbon Fund projects in Bulgaria have been registered in line with these procedures, paving the way for further credit deliveries, albeit pending Bulgaria regaining eligibility to trade under the Kyoto Protocol.