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Beijing: Li Li: 86-10-5861-7852 Washington, August 29, 2006—The World Bank today announced completion of the allocation of participation in the first tranche of the US$1.02 billion Umbrella Carbon Facility (UCF), which has been established to purchase certified emission reductions from two industrial gas projects in China. The largest carbon finance deal ever is a windfall for sustainable development in Chinaand a major opportunity for the private sector. The Umbrella Carbon Facility, managed by the World Bank will handle large greenhouse gas reduction purchases under the flexible mechanisms of the Kyoto Protocol. The Facility has pulled together multiple sources of funding to purchase large volumes of greenhouse gas emission reductions from pre-identified projects, on behalf of governments and private firms. About 75% of the money in the Facility represents private capital. The participants in the first tranche of the UCF include public and private entities in a number of World Bank managed carbon funds— Danish Carbon Fund, Italian Carbon Fund, Netherlands CDM Facility, Prototype Carbon Fund, Spanish Carbon Fund—as well as additional private sector companies: Canadenis Acquisition Limited (Natsource); Climate Change Capital; Deutsche Bank; Energi E2; Endesa; Mitsui & Co., Ltd.; Public Power Corp. S.A.; RWE Power AG; Statkraft Carbon Invest AS; Tamarisk Acquisition Corporation (Natsource); TEPCO; Trading Emissions PLC. “Natsource congratulates the World Bank for developing the Umbrella Carbon Facility and is pleased to be participating through Canadenis and Tamarisk”, said Jack Cogen, President of Natsource LLC, an asset management company. “The deal is a win for the private sector that must meet its emissions targets cost effectively and for the environment,” said Cogen. The €799 million (US$1.02 billion) first tranche is purchasing greenhouse gas emission reductions from two Chinese companies. The make-up of the UCF was announced by the World Bank today after the two projects involved were approved as Kyoto compliant projects by the Executive Board of the Kyoto Protocol’s Clean Development Mechanism. They will cap the emissions of HFC-23 (trifluoromethane), one of the most potent greenhouse gases responsible for climate change through global warming. HFC-23 has a global warming potential that is 11,700 times that of carbon dioxide. According to Joelle Chassard, Manager of the Carbon Finance Unit at the World Bank. “By opening up the Facility to both the Bank managed carbon funds as well as additional participants from the private sector, we have helped bring liquidity to the growing carbon market.” Added Chassard, “And the Umbrella Carbon Facility is producing a double dividend with the government of China receiving 65% of the proceeds for sustainable development through their newly established Clean Development Fund.” China’s Clean Development Fund is expected to finance climate mitigation projects in priority sectors such as energy efficiency, renewable energy, coal mine methane recovery and use. “The beauty of the UCF - Tranche One is that it pursues not only the mitigation of climate change, but also deals with the Sustainable Development by earmarking a specific amount of revenue to be utilized by the Government of China through its Clean Development Fund,” said Takeshi Hokari of the Environmental Business Department of Mitsui & Co., Ltd., one of the private sector participants in the Umbrella Carbon Facility. “We look forward to the dissemination of such methods to enhance activities to realize sustainable development in CDM projects around the world.” The World Bank already administers nine carbon funds and facilities, including the Community Development Carbon Fund (CDCF) and the BioCarbon Fund (BioCF) which help poor countries and communities to benefit from carbon trade. Including the China HFC-23 window of the Umbrella Carbon Facility, the total carbon funds and facilities being managed by the World Bank will exceed US$1.9 billion.
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