UN Division for Sustainable Development

Case Study Detail Record

Organization type:	Intergovernmental Organization

Name of Organization:	The Renewable Energy and Energy Efficiency Partnership (REEEP)

Name of Focal Point:	Binu Parthan

Initiative Title:	Securing Financing for RE/EE Projects in Southern Africa through Gold Standard CDM

Internet links:	http://www.reeep.org/index.cfm?articleid=1394&parentid=915

Scope:	Regional: - Africa

Status:	Ongoing

Timeframe:	Start: 2006 End:

Lead Institution:	SouthSouthNorth

Stakeholders/Partners:	REEEP, Gold Standard, UNDP Millennium Development Goal Carbon Facility, GED, TaTEDO

Relevent issues:	- Mitigation policies/measures - Innovative financing solutions and technology transfer

Objectives/Challenges:

Objective:
This project aims to facilitate the financing of smaller renewable energy and energy efficiency (RE/EE) CDM projects in Southern Africa using the Gold Standard (GS) as leverage.
Challenges:
There is a very low level of education on CDM in the two partner countries. The complexity of CDM financing is therefore not yet finding much traction amongst stakeholders. In addition, the mixture of high risk, low return and conceptually new projects, together with the bureaucracy of public financing make achieving financial closure particularly challenging.

Lessons Learned:

While CDM revenues could catalyse project development it cannot substitute project financing. A project which is feasible for the CDM project cycle may not always be feasible as a stand-alone project.

Policy Options:

The REEEP project will result in PINs for CDM projects from Africa which will be available to countries interested in certified emission reductions from Africa and supporting African CDM projects.

Summary:

Substantial challenges exist for the commercialisation of smaller RE/EE projects, with financing often cited as a major barrier. This despite there being a significant demand for African Gold Standard carbon credits internationally. Part of the solution is to incorporate GS carbon finance when considering the financing structure of these projects to reduce risk. Another aspect is to build capacity and networks on the issue of carbon finance within the countries.
SouthSouthNorth is working with the Gold Standard, and implementing partners GED (Mozambique) and TaTEDO (Tanzania) towards this solution in the following ways:
• Holding capacity building workshops in Mozambique and Tanzania to distribute the ‘Financing and Transaction Guide’ and to raise capacity and awareness around carbon financing. In addition these workshops served to build networks within the financial, government and project development sectors in the countries
• Achieving the financial closure of at least one Gold Standard RE/EE carbon case study project in each country. These projects will ensure credible emission reductions and boost access to reliable energy services for low-income households, thereby contributing to sustainable development and poverty reduction – a major objective of the Millennium Development Goals
• Holding two workshops following the financial close of the projects to disseminate the project learnings and build awareness of successful financing models