Serious about the power business

The recently completed Africa Carbon Forum in Nairobi had significantly more participants than expected.

The UNEP Risø Centre at Risø DTU was one of the main organisers. At Africa Carbon Forum, foundations were laid for a substantially increased African involvement in clean development mechanism (CDM) projects. CDM projects promote sustainable development and economic growth in African countries. More than 1000 people from the private and public sector in African and other countries took part in Africa Carbon Forum, held in Nairobi in March 2010.


Africa is involved in relatively few CDM projects
Africa accounts for just under two per cent of the 2,060-plus registered clean development mechanism projects in 63 countries worldwide. However, the continent has seen a strong growth trend in the past few years. There are now 122 CDM projects in Africa that are either registered or in the pipeline for validation or registration. This up from 116 in 2009, 75 in 2008 and just 42 in 2007.

One of the new developments under the CDM is the option to establish so-called programmes of CDM activities, which allows for many individual project activities to be put together under a single programme, to reduce transaction costs and increase efficiency of implementation.
“Programmatic CDM is clearly seen as a very attractive option by African countries and several programmes are under development in a handful of countries; but, it is also clear from the discussions that to make it a success there is a need for targeted capacity-building, both for DNAs (representatives from African national authorities) and project developers,” says John Christensen from the United Nations Environment Programme at Risø National Laboratory for Sustainable Energy, DTU. The UNEP Risø Centre was one of the main forces behind Africa Carbon Forum.

“Before when we talked about Africa it was all about the need to raise capacity and raise awareness about the potential for offset projects in Africa. Now we see a higher level of understanding, we see real eagerness to get involved, and plenty of business being conducted. It’s obvious the capacity-building is paying off and the message is getting out,” said John Kilani Division Director at the UNFCCC secretariat, another of the core organisers.


Nairobi Framework established by Kofi Annan increases African involvement in CDM
He spoke on behalf of the five UN organisations and two multilateral development banks, which form the Nairobi Framework, aimed at promoting CDM in Africa. Launched in 2006 by then Secretary-General Kofi Annan, the Nairobi Framework’s partners now include the United Nations Development Programme, United Nations Environment Programme, the World Bank, United Nations Institute for Training and Research, United Nations Conference on Trade and Development, the African Development Bank and the UNFCCC secretariat.

“There is a growing number of projects in Africa and a growing number of countries hosting projects. What’s more, some project developers are even prepared to pay a premium for offset credits originating from Africa, no doubt because they are confident in the long-term growth prospects for CDM on the continent,” said John Kilani, who is Director of the secretariat’s Sustainable Development Mechanisms programme.
"The number of projects in Africa grows and development spreads to more and more African countries. What is more, some project developers are even willing to pay a premium price for CO2 credits from Africa, undoubtedly because they believe in the long-term growth potential for CDM in the African continent, "said John Kilani.

The rich countries are buying CERs

Under the CDM, projects that reduce greenhouse gas emissions and contribute to sustainable development can earn saleable certified emission reduction (CER) credits. These CERs can be used for compliance under the Kyoto Protocol.
“Africa Carbon Forum 2010 has been a serious and businesslike meeting of people with African emissions reduction projects and people who want to invest in them. Africa’s slow start in the CDM business seems now to have been more about finding the right ways to structure projects in the sectors that are Africa’s national specialities than about a fundamental incompatibility,” said Henry Derwent, President and CEO of the International Emissions Trading Association, the Nairobi Framework’s private sector partner in holding the three-day Forum.

“Investors in compliance and voluntary markets alike are seriously interested in good quality African emissions reduction projects, to balance their portfolios and meet their climate change strategies. Africa Carbon Forum has helped them and project promoters alike,” Henry Derwent said.

African exchange of experience prior to Carbon Forum

For two days prior to the carbon forum, some 85 delegates representing 44 African countries met in Nairobi to share their experiences and ideas on how to increase CDM projects on the African continent. These CDM Designated National Authorities (DNAs) are responsible for, among other things, laying the policy groundwork for CDM in their countries and for attesting to the sustainable development benefits of each project prior to registration. The DNA Forum was established by the CDM Executive Board in 2006 to help build national and regional capacity.

John Christensen,the UNEP Risø Centre was invited to speak about experiences of capacity building at the DNA forum, as the centre has the most experience in the UN in this field. So far the UNEP Risø Centre has been supporting the development in 33 African countries and currently has CDM activities in 22 African countries.

The third Africa Carbon Forum is to be held in March 2011 in Morocco.


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