Getting Africa to use more carbon financing – COP 17 workshop

Africa is using much less than its share of global financing available for carbon reduction projects, but the process to apply is complicated and a special facility has been set up to help. The African Carbon Asset Development facility has funded successful projects to reduce carbon emissions in Africa. A workshop was held last weekend for sharing practical lessons, attended by about 30 developers, investors, and local experts and bringing together African carbon asset development partners and financiers and beneficiaries including entrepreneurs on how to make carbon finance work for Africa.
The workshop highlighted successful carbon investment projects in Africa supported by the African Carbon Asset Development facility (www.acadfacility.org), formed by the United Nations Environment Programme (www.unep.org) in cooperation with Standard Bank Group (www.standardbank.co.za) and funded by the German Federal Environment Ministry (www.bmu.du/english). The ACAD partnership addresses key barriers that have stopped more people in Africa benefitting from carbon financing on projects as it provides technical assistance, seed capital, and specialized advisory services to both green entrepreneurs and to banks across Africa.
Although carbon financing is growing in importance worldwide, Africa’s share remains very low. According to ACAD facility’s website, in 2009 around $84 billion was invested in 684 emission reduction projects in emerging markets, but African nations got only 2% of the global total. The aim of ACAD is to help increase Africa’s carbon markets.
The workshop was held (somewhere) in Durban as part of a Conference of Parties (COP 17/CMP7) to discuss the United Nations Framework Convention on Climate Change (at sometime) over the weekend 3-4 December. It was organized by Standard Bank and UNEP.
Two examples of successful projects were cited. Johannesburg-based AAP Carbon (www.aapcarbon.com) has developed a technology that can generate heat and electric power from furnace waste gases emitted during ferrochrome smelting. The development was piloted with a financing plan which included carbon credit revenue.
A plant near Rustenberg, South Africa is already operational for London-listed International Ferro Metals (www.ifml.com) and is reducing greenhouse gas emissions by over 200,000 tons a year. Alex Berger, Director of AAP Carbon, explained how the project benefited from UNEP support so that it could tackle challenges in registering for a Clean Development Mechanism (CDM), which is a global framework allowing industrialized countries to fund carbon emissions in places where this can be done more cheaply. The AAP Carbon project is now in the final stages of registration and has apparently been certified with the premium Gold Standard. Several investors are interested in using the climate-friendly technology for other plants, after IFM and AAP Carbon showed that it works.
Kevin Fruin, a South African small business owner, said there is scope to make bricks in a way that is more efficient with energy. He said that construction accounts for almost 30% of South Africa’s greenhouse gas emissions and 200 small and medium enterprises (SMEs) in South Africa make clay bricks. He is one of the small businesses piloting a cleaner production technology called “Vertical Shaft Brick Kiln”. This can save manufacturers at least 50% of coal use and reduce carbon dioxide (CO2) emissions and air pollutants such as soot and black carbon. ACAD is supporting the development of a national programme using the CDM to scale up these demonstration projects so that other businesses can use the technology. It is giving financial advisory, legal due diligence, and a customized carbon-auditing tool for participating SMEs.
The session also provided some 30 participants an opportunity to learn more about how to benefit from grants from ACAD and training.

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