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African Carbon Asset Development Facility

Background

The African Carbon Asset Development Facility (ACAD) was a BMU-supported partnership between the United Nations Environment Programme, its Risoe Centre (renamed UNEP DTU Partnership) and Standard Bank, which lasted from 2009 to 2014. It was the initiative’s target to overcome the difficulties faced by African countries and especially African LDCs in attracting and hosting CDM projects. Lacking capacity in the finance sector to transact carbon deals and to leverage commercial debt for CDM projects formed a barrier that stunned otherwise technically and economically viable projects. This situation has constrained many African countries from being able to deploy low-carbon technologies more rapidly and implement national green growth strategies.
 

Implementation

The ACAD supported capacity-building activities for banks and investors and also provided seed funding to project developers. What made ACAD’s approach to market and capacity development different was that its investment was project-specific, practical, flexible, and highly demand-driven. 

ACAD activities were organised along three main lines:
The first support line entailed supporting projects that were not immediately commercially viable through grants to ensure that these projects could complete critical milestones like environmental impact assessments and project validation.
The second support line focused on technical assistance for financial institutions. ACAD partnered with local financial sector actors on several capacity development activity lines: multi-faceted technical assistance to address partner institutions’ specific needs, including capacity building activities for African banks. 
The third support line consisted of stakeholder outreach and methodology development. ACAD has, for example, supported the adoption and application of a standardised baseline and initiated the African Bankers’ Carbon Forum, which brings together various institutions such as regional development banks, private sector financial institutions and insurance companies.
 

Results and Outlook

In the period from 2009 to 2014 the Facility supported 17 CDM projects in nine different Sub-Saharan African countries. Seven out of the 17 projects supported have reached CDM project registration. In addition, more than 320 African financial institution participants were trained. ACAD has also supported the development and registration of regional grid emission factors for both the Southern and Western African Power Pool, as well as their registration as standardized baselines with the UNFCCC. This standardized baseline was the first ever registered that now covers 30 nations. The Facility is also a reference model for the CDM Loan Scheme implemented by the UNFCCC.

African Carbon Asset Development Facility (ACAD)

Countries: Benin, Burkina Faso, Côte d'Ivoire, Gambia, Ghana, Guinea-Bissau, Cape Verde, Congo, Kingdom of Eswatini, Lesotho, Liberia, Mali, Mozambique, Namibia, Niger, Nigeria, Senegal, Sierra Leone, South Africa, Togo

Role of BMU: Co-financed by BMU

Lifecycle: 2009 - 2014 (completed)

Implementation: United Nations Environment Programme

Other Organisations Involved: UNEP Risoe Centre on Energy, Climate and Sustainable Development, Standard Bank UNFCCC Regional Collaboration Center Kampala

Contact: Søren Lütken, snlu@dtu.dk

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