In  the  last  few  weeks  alone,  the  Fund  has  signed  two  ERPAs  and several  other  term  sheets  in  Asia,  Africa  and  Latin  America.  The  projects,  using  wind  energy, improved waste management and energy efficiency technologies, are to generate in excess of 4 million  CERs  in  the  period  2013-2020.  The  early  sale  of  these  CERs  is  of  crucial  importance  to these  projects,  as  substantial  uncertainty  about  the  existence  and  design  of  a  post-2012 agreement  continues  among  project  developers.  By  signing  these  ERPAs  with  the  Fund,  the project  developers  concerned  have  converted  their  carbon  credits  into  a  bankable  revenue stream, while significantly reducing the risks they face in today’s carbon credit market. The core value proposition of the fund thus continues to be reaffirmed.
 
Launching the Fund in early 2008, its five investors, the European Investment Bank, Caisse des Dépôts, Instituto de Crédito Oficial, KfW Bankengruppe and the Nordic Investment Bank stressed the  Fund’s  aim  of  providing  certainty  to  the  carbon  credit  market  beyond  2012.  How  relevant this  mandate  is,  given  the  current  risk  scenarios  facing  project  developers,  is  born  out  by  the number of enquiries the Fund is receiving from project developers looking to sign ERPAs with it now.
 
Simon Brooks, Vice President of the European Investment Bank (EIB), emphasizes risk reduction as the Fund’s key contribution: “Our key aim in launching this fund was to facilitate project business after 2012 by offering a solution to the main issues facing project developers: the timely coming into effect  and  the  potential  shape  of  a  post-2012  agreement,  income  levels  from  future  carbon  credit revenues, and the  availability  and  reliability  of  buyers  for ERPAs signed  in  advance. The  Fund offers solutions  to  all these  problems,”  stresses  Brooks,  ”  it  guarantees  to  purchase  CERs  based  on  current Kyoto  regulations,  irrespective  of  any  potential   changes  to   the  framework   in  the  future  and independent of whether an agreement has been reached in time or not.” The fact that the investors are all Aaa-rated public financing institutions precludes any potential counterparty risk project developers may face and allows them to monetize their projects now, if needed, based on the future income guaranteed by an ERPA.
 
Among the ERPAs already signed is a wind energy project in China. Mr Xie Yufan of Hainan Wind Farm,  a  project  also  signed  by  the  Fund  comments  his  decision  to  sign  an  ERPA thus:,  “by signing  this  ERPA  with  the  Post  2012  Carbon  Credit  Fund  now,  we  have  solved  several  of  our problems already and can get on with implementing our project. There is now no need for us to worry  about  when  and  what  kind  of  international  agreement  might  come  into  place  or  what may  happen  to  the  price  of  CERs  by  the  time  we  generate  them.  We  know  exactly  what  our budgets will look like and can plan accordingly.” 
 
"In  these  uncertain  times,  we  are  pleased  to  report  that  we  are  open  for  business"  comments Walter  Blasberg,  Managing  Director  of  Conning.  "We  offer  project  owners  and  developers  a fantastic  opportunity  to  add  price  certainty  to  their  Post  2012  emissions  portfolio  ahead  of Copenhagen. It's a terrific window of opportunity for those strapped for cash or risk averse." 
 
 
Within  just  two  short  weeks  the  Fund  signed  an  additional  eight  term  sheets  with  projects  in China,  India  and  Nigeria, using  a  diverse  range  of  technologies  including  wind  energy,  energy efficiency  waste  management  and  landfill.  Apart  from  the  security  offered  by  the  Fund,  its flexible pricing structures are proving attractive to project developers.  
 
Among  the  larger  projects  contracted  by  the  Fund  is  a  wind  energy  project  in  India.  India currently ranks 5th in the world with a total wind power capacity of 9,587 MW in 2008. The two sites involved in the project are to feed a total of 49 MW of clean energy into the regional grid. Urs Brodmann, Member of the Executive Board at First Climate, investment advisor to the Post 2012 Carbon Credit Fund, comments: “This is an exciting project because, once registered it will generate a total of some 700,000 CERs in the period 2013-2020. In addition, it offers replication potential,  since  there  is  a  large  pipeline  of  similar  projects  waiting  to  leverage  their  post-2012 carbon credits for financing.”
 
The Nigerian landfill project deserves special interest, as Africa has yet to reach anywhere near its  full  potential  in  terms  of  CDM  projects.  Until  now  only  30  projects  in  Africa  have  been registered  with  the  UNFCCC,  representing  a  mere  1.9%  of  projects  worldwide.  Urs  Brodmann explains  the  particular  significance  of  this  project:  “The  project  in  Lagos  stands  out  for  two reasons: the dearth of CDM projects in the region, in fact only two projects have been registered in  Nigeria  to  date,  and  the  additional  environmental  and  socio-economic  benefits  attached  to this particular project. Where there is now a garbage dump, right in the suburbs of Lagos, this project is creating a waste treatment facility for sorting out recyclable and compostable waste, creating  new  jobs  in  a  city  with  an  official  unemployment  rate  of  12%.  The  project  will  avoid methane emissions from the dumpsite by converting organic household wastes into compost, a marketable  product.  In  addition, a sanitary landfill  will  be installed for  the  residual  wastes that will capture the gases emanating from the site.” The project will generate an expected 260,000 CERs in the period 2013–2017.
 
The investors welcome inquiries from owners or developers planning projects that will generate CERs after 2012. Inquiries should be addressed to First Climate, investment adviser to the Fund or Conning Asset Management (Europe) Limited, investment manager of the Fund.
 

The  European  Investment  Bank  (EIB)  is  the  long  term  lending  institution  of  the  European  Union,  financing projects  which  further  European  objectives.  Carbon  finance  initiatives  form  an  integral  part  of  the  EIB’s response  to  the  economic  and  environmental  challenges  raised  by  climate  change.  The  EIB  has  established market  mechanisms  to  encourage  carbon  trading  schemes,  in  cooperation  with  other  public  and  private financing institutions, at national and  international  level. By  getting involved in carbon fund sponsorship,  the EIB  aims  to  promote  the  use  of  both  public  and  private  sector  capital  to  support  low  carbon  projects.  EIB-sponsored carbon funds specifically focus on the less developed areas of the carbon market. They aim to help companies, EU Member States, and other countries and institutions to meet their carbon emission obligations under  the  Kyoto  protocol  and  the  European  Union’s  Emission  Trading  Scheme  (ETS),  through  environment friendly investments.
 
First Climate is one of Europe’s leading carbon asset management companies. With offices on five continents and more than ten years’ experience in the market, it is one of the few intermediaries to cover the entire carbon credit  value  chain.  First Climate  develops, finances, and implements CDM,  JI,  and  VER  projects, purchases  the resulting carbon credits, and customizes trading solutions for companies subject to the EU ETS. As investment advisor  to  several  institutional  investors,  First  Climate  structures  and  develops  carbon  funds  and  related products. In the voluntary  market, the company provides  VERs  verified  according to  the  highest  international standards. First Climate is one of the main sponsors of the Gold Standard Version 2.  
 
Conning  Asset  Management  (Europe)  Limited  (conning.com)  is  part  of  Conning  &  Company,  which  has assets  under  contract  in  excess  of  USD  103  billion  as  of  31  March  2009.  Conning  has  been  active  in renewable and sustainable investments since 2003 and, along with its parent Swiss Re, has a commitment to developing a portfolio in sustainable or alternative energy investments. In 2006, Conning took part in structuring  and  placing  a  EUR354  million  European  Clean  Energy  Fund,  one  of  the  first  pan-European, multi-technology  clean  energy,  mezzanine  and  equity  funds.  The  Post  2012  Carbon  Credit  Fund  is  the latest  of  successful  carbon-related  investments  for  Conning.  Conning  continues  to  pursue  similar opportunities  to  expand  the  portfolio.  Conning  has  recently  been  mandated  by  the  United  Nations Economic  Commission  for  Europe  to  design  a  USD  250m  Eastern  European  energy  efficiency  and renewables   fund.      Conning,   a   fully-owned   subsidiary   of   Swiss   Re,   is   headquartered   in   Hartford, Connecticut with offices in London, Dublin and New York.  
 
Contact

First Climate
Fritz Wilhelm
Head Corporate Communications
Tel.: +49 (0)6101 - 5 56 58 - 34
Fax: +49 (0)6101 - 5 56 58 - 77
E-Mail: fritz.wilhelm@firstclimate.com

Conning Asset Management (Europe) Limited
Markus van der Burg
Director
Tel.: + 44 (0)20 - 7933 4501
Fax: +44 (0)20 - 7933 6501
E-Mail: Markus_VanderBurg@conning.com
 
European Investment Bank (EIB)
Una Clifford
Press Officer
Tel: +352 4379 - 83326
Fax: +352 4379 - 61000
E-Mail: u.clifford@eib.org