4 May 2004 – EcoSecurities, the carbon trading adviser, and Standard Bank London Limited (SBL), the investment banking arm of South Africa’s Standard Bank Group, have announced the launch of the Denmark Carbon Facility, aimed at acquiring greenhouse gas emission reduction credits on behalf of the Danish Ministry of the Environment and with the participation of Danish industry. This deal was structured with the legal assistance of Baker & McKenzie in London.
The Facility will be managed by EcoSecurities and SBL, working in close collaboration with the Danish Environmental Protection Agency. The initial contract is for 59 million Danish Kroner, representing the largest contract yet for purchase of emissions credits signed by the Danish Ministry of the Environment. This is expected to grow over the coming years. While the initial funding is provided solely by the Danish government, the Facility also aims to attract the direct participation of Danish industrial companies through marketing initiatives and a dedicated website. The Facility should therefore contribute substantially towards the desired cost-effective fulfilment of Denmark’s international climate obligations under the Kyoto Protocol and the EU Emissions Trading System.
The Kyoto Protocol is a UN agreement which aims to reduce the emission of greenhouse gases that lead to global warming between the years 2008-2012. The EU Emissions Trading System is a policy instrument created by the European Union to engage European industry in the process of reducing greenhouse gas emissions starting in 2005, using emissions trading as an important tool to reduce overall costs of compliance.
The Facility will focus on the acquisition of emission reduction credits arising from the implementation of the projects under the Joint Implementation and Clean Development Mechanisms of the Kyoto Protocol in Central and Eastern Europe. The projects may be based on energy efficiency, fuel switching, methane capture, or reduction of industrial emissions.
“We have a good agreement. EcoSecurities is one of the world’s most experienced climate change consultants, and Standard Bank is active in the financing of climate change projects in the emerging markets. EcoSecurities-Standard Bank will also facilitate the participation of Danish enterprises, through emission reduction sales and providing informational services to the Danish participants. With this agreement, we are therefore helping to prime the market for the private sector” says Hans Christian Schmidt, Danish Minister of the Environment. He continues: “The agreement should be of interest to Danish enterprises who wish to purchase CO2 credits, or who can supply competitive technology for climate change projects in Central and Eastern Europe. Equally important, the agreement contributes to meeting the Danish climate obligations under the Kyoto protocol in a cost-effective manner. The projects will be of benefit both to the global climate and to the environment in those countries where the projects are implemented”.
“We are very pleased to be working in this initiative. EcoSecurities has been involved in this field for many years, and this provides us with a chance to directly contribute to the real objectives of the Kyoto Protocol and the EU Emissions Trading System”, says Pedro Moura Costa, Managing Director of EcoSecurities and Facility Manager. “Given our offices in Russia, Romania and the Czech Republic and substantial business in the Balkans, Baltic Republics and Ukraine, together with our involvement in the financing of clean energy projects worldwide, Standard Bank is well placed to source and structure emission reduction projects in Central and Eastern Europe on behalf of the Danish government”, says Allan Walker, Head of Power and Infrastructure of Standard Bank and Facility Financial Manager.
EcoSecurities, founded in 1997 by experts in this field, has recently been voted “Best JI and CDM Advisory Firm” by readers of ‘Environmental Finance’ magazine for the third year running. With offices in the UK, the US, Brazil, Holland and Australia, EcoSecurities is the largest dedicated climate change advisory firm in the world, specialising in emissions trading and strategic advisory services to the sector. EcoSecurities has developed or advised on CO2 emission reduction projects in over 30 countries and has consulted to over 15 governments on their climate change policies. EcoSecurities has structured and transacted several of the world’s first and largest certified emission reduction trades to date and is currently selling emission reductions from its own landfill gas operations in Brazil.
Standard Bank London, part of the Standard Bank of South Africa banking group, has a strong focus on the energy, mining and metals businesses in the global emerging markets and substantial experience in raising equity, debt and mezzanine funds for such projects, whether they be greenfield or refurbishments of existing projects. The bank has many governmental and corporate clients which can derive significant financial benefit from carbon credits arising from projects to reduce emissions worldwide. The bank signed an exclusive cooperation agreement with EcoSecurities in 2003.