The World Bank’s private sector arm and the Dutch government agreed October 5 to buy more than US$6 million in carbon dioxide (CO2) emissions reductions from six small hydropower projects in India.
The World Bank’s International Finance Corp. (IFC) is to use Dutch government funds to buy the India hydro plants’ emissions reductions, which Amsterdam then will use to buy certified emissions reductions to comply with its targets under the Kyoto Protocol for reducing greenhouse gases.
The reductions are being purchased from Dodson-Lindblom Hydro Power Private Ltd. (DLHPPL) and Ascent Hydro Projects Ltd., which are owned, through subsidiaries, by two U.S. companies, engineering firm DLI and infrastructure investment group Franklin Park India. (HNN 4/21/06)
DLHPPL acquired and refurbished the 12-MW Bhandardara 1 hydropower project in India’s Maharashtra State. In the near term it plans to acquire and rehabilitate the 34-MW Bhandardara 2 project, a second facility in the Upper Pravara River Basin.
Ascent built and operates the 2.2-MW Birsinghpur hydro project in Madhya Pradesh State. It also is developing three greenfield mini-hydropower projects — 5-MW Sechi, 5-Melan, and 4-MW Panwi — on the Sutlej River in Himachal Pradesh State. (HNN 7/27/06)
ï¿½We are excited about the sale of carbon credits from our projects to IFC as it helps our companies to finance and implement such environmentally friendly projects,ï¿½ Chairman V.V. Rajadhyaksha of DLHPPL and Ascent said.
In addition to the carbon reduction deal, IFC signed a loan agreement with the companies in December 2005 for US$17 million to finance the six hydro projects.
IFC hopes to replicate hydro deals around world
The carbon reduction purchase is part of a broader push by the Washington-based multilateral lender to spur carbon trading markets around the world.
“I welcome this agreement, which will open the door for hydropower projects to access the commercial carbon finance market and improve their returns on risk capital,” IFC environment director Rachel Kyte said. “We hope that it will set an example that can be replicated by similar renewable energy projects across key markets.”
The IFC said by the end of September it had signed emissions reduction purchase agreements with six firms: run-of-river hydro projects in Brazil and Sri Lanka, a methane capturing and flaring operation in Argentina, hydro and wind power operators in India, and a sugar mill in India.