First 100% private sector emissions trading fund will invest in Central and Eastern Europe

“The goal is to get emissions credits for investors,” Karen McClellan of the European Bank for Reconstruction and Development (EBRD) told edie. The project is being funded by EBRD, Dexia Project and the Public Finance International Bank. Thus far, euros 61m has been raised with euros 100-150m the ultimate goal.

According to McClellan, who conceived the fund, a variety of projects will be eligible, including:

• fuel switching from coal to natural gas in district heating systems
• completion of several small hydro projects
• electricity generation and compressed fuel production using methane gas from landfill sites
• creation of energy service companies that are paid based on their services’ delivery of energy savings

Like the World Bank’s emissions trading system (see related story), the EBRD/Dexia scheme will get under way before the Kyoto Protocol’s mechanisms for emissions trading have been agreed. McClellan believes that the projects receiving funds should meet Kyoto criteria under the Clean Development Mechanism. “But even if Kyoto doesn’t get ratified there are so many voluntary agreements that companies are participating in that they want to begin earning emission credits,” says McClellan. “So this mechanism is already being used.”

The EBRD/Dexia scheme will announce details of the first project receiving funding in the next few months and McClellan believes things will move quickly. “We got board approval in October and we’ve moved really fast,” she says.