Ecobank Plans Major Carbon Financing Roll-out in Africa

The pan-African banking group, Ecobank, is putting together synergy in exploring opportunities in the Clean Development Mechanism (CDM) projects evaluation and carbon financing structure with plans for a major roll-out in Africa aimed at ensuring a low carbon economy.

Group CEO Anold Ekpe in a message to attendees of a CDM workshop in the Ghanaian capital, Accra noted that Africa has a huge potential for tradable emission reduction.

The bank believes investments in CDM projects in Africa will offer a solution to the double jeopardy of poverty and changing climate patterns which undermines the efforts at achieving the Millennium Development Goals (MDGs), Ekpe said.

Ekpe said while investment in technology will improve energy efficiency, the United Nations has projected the Africa’s CDM market to generate US$1billion by 2012.

The Accra event was co hosted by Ecobank in collaboration with World Bank /IFD and brought together participants from both the private and public sectors including banks, insurance companies and other civil society organizations from around Africa to harness sufficient information and ammunition to guide their involvement to fully participate and capitalize on opportunities available in Carbon Markets.

Issues to engage attention of participants and take center stage at the workshop would be road map mechanisms and strategies at strengthening the capacity of financial institutions in carbon finance and to provide information on how to overcome constraints associated with investing in CDM projects.

“This means that additional revenue will be available for financing development projects, which will invariably leverage project implementation,” Ekpe said.

“Investments in CDM were highly tipped to offer solutions to Africa’s double jeopardy of poverty and climate change”.

He added that the workshop was consistence with the bank’s dual mandate to build a world class African Bank and contribute to the socioeconomic and financial development of Africa while delivering superior shareholder returns and investing in capacity building in Africa.

The Clean Development Mechanism, established by Article 12 of the Kyoto Protocol, allows ratified countries or private entities from those countries to obtain carbon credits by investing in projects that reduce emissions.

The Kyoto Protocol is one of the measures adopted by the international community in 1997 which sets out qualified and binding commitments to limit or reduce Green House emissions for 40 industrialized countries and developing countries to a market economy during the period 2008 to 2012.

Carbon financing is termed as resources earmarked for funding projects that generate or has the potential to generate carbon dioxide and other greenhouse gas emission reductions in the form of tradable emission reductions.

But countries with commitments under the Kyoto Protocol can acquire emission units from other countries with commitments under the Protocol and use them towards meeting a part of their targets.

CDM furthermore allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of carbon dioxide.

Karan Capoor, a carbon finance expert at the Carbon and Environmental Finance Division of the World Bank, said $128 billion has been made available globally for countries wanting to partake in carbon emission reduction business.

Latin America and the Caribbean have close to 31 per cent of the projects while Asia and pacific countries have claimed 66.13 per cent, leaving Africa with less than 3 per cent and some other countries holding onto 0.65 per cent.

Image credit: Leandro Ciuffo/ Flickr