World Bank steps up presence in booming global carbon market

The International Finance Corporation (IFC), an investment arm of the World Bank, has this week stepped up its presence in the global carbon market inking its first carbon delivery guarantee agreements in Sub-Saharan Africa and South Asia.

The organisation said the two new deals would help bolster the emerging carbon markets in both regions and help provide valuable funds for carbon reduction projects. It added that the aim of the agreements was to limit project risks and "give companies selling carbon credits the chance to access a wider range of potential buyers".

The IFC has agreed to acquire 900,000 carbon credits from one of South Africa's leading fertiliser producers, Omnia, generated as a result of the company's investment in a new nitrous oxide destruction facility.

It has also signed a deal to buy 850,000 credits from India-based Rain CII Carbon, the largest global merchant of calcined coke. Indian Company Rain used IFC financing to install waste heat recovery facilities, designed to cut the company's energy use and carbon footprint.

The carbon delivery guarantee will enable the IFC to distribute carbon credits from the two company's projects to buyers in developed countries and " pass an attractive price back to the projects".

The deal forms part of the Kyoto Protocol's Clean Development Mechanism, whereby businesses in developing countries can qualify to sell Certified Emission Reductions (CERs) in global commodity markets, providing they decrease their output of greenhouse gases.