Loan scheme for CDM projects launched in Ethiopia

Loan scheme for CDM projects launched in Ethiopia

(Addis Ababa, Ethiopia -- 19 April 2012) A new loan scheme was launched this week, which is aimed at helping to support Clean Development Mechanism (CDM) projects in least developed countries (LDCs).

The CDM Loan Scheme will provide interest-free loans for CDM projects to LDCs as well as countries that have fewer than 10 registered CDM projects. The scheme, which is run jointly by the United Nations Framework Convention on Climate Change (UNFCCC), the United Nations Environment Programme (UNEP) Risoe Centre and the United Nations Office for Project Services (UNOPS), was launched during the opening session of the fourth African Carbon Forum, taking place in Ethiopia this week.

The loans will finance: the development of Project Design Documents (PDD); validation by a Designated Operational Entity; registration of the project with the UNFCCC; and the monitoring and verification of Certified Emissions Reductions (CERs).

"The loan scheme is a chance to help improve the distribution of CDM projects in underrepresented countries," said John Kilani, Manager of Sustainable Development Mechanisms for the UNFCCC. “It is our hope that when we gather together next year and look back, we can see what impact this loan scheme has had at ensuring the active participation of Africa in the CDM.”

The loan scheme will be extended to projects that meet a number of criteria. These include:
• A high probability of registration with the UNFCCC;
• A reasonable expectation of generating at least 7,500 CERs per year for projects in LDCs and 15,000 CERs per year for projects in non-LDCs;
• Documentation that is developed with an experienced CDM consultant.

The European Union Emission Trading Scheme (EU ETS) which is the main purchaser of CERs, will only accept the carbon credits from projects in least developed countries starting next year. Africa, with its high potential for energy efficient, non-polluting projects, also contains a large number of LDCs, making the launch of this scheme at the right time and in the right place, said John Christensen, Head of UNEP Risoe Centre.

“The time is right for Africa to increase its share of CDM projects,” he said. “We have been working to try and increase the engagement of African countries in the carbon market. We have had some modest success. We hope with the loan scheme and continued capacity-building we can make a real difference in the number of projects here.”

Applications are now being accepted for the first round of reviews for the loan scheme, which will end in June. For more information on the scheme please visit: <>