World Bank unit advances carbon fund plans for 11 China plants of 122 MW

The World Bank’s International Finance Corp. (IFC) has advanced for IFC board consideration the proposals of two China developers to sell carbon emissions reductions from 11 small hydroelectric projects totaling nearly 122 MW.

It is anticipated that the projects will be registered under the United Nations’ Clean Development Mechanism to sell certified emissions reductions equal to the amount of carbon they would offset from an equivalent amount of fossil-fueled generation.

The IFC provides services to support projects’ long-term sustainability by helping them participate in the carbon market and helping structure contracts that minimize risks associated with the projects’ delivery of certified emissions reductions. IFC plans to purchase the projects emissions reductions through a program with the Netherlands Carbon Facility called IFC-Netherlands Carbon Facility (INCaF).

Xinglong Hydropower

The IFC board is expected to act in late October on a proposal to support Xinglong Hydropower Co., which is developing hydro projects in China’s Guizhou Province. The projects in question, both run-of-river plants on the Yuliang River, are 21-MW Najiang and 12-MW Zijang, representing a total investment of US$26 million to US$28 million.

Naijiang was reported nearly ready for commercial operation. Construction of Zijang was expected to begin in September with commercial operation set for late 2009. Located in narrow, steep-sided valleys, the projects have small reservoirs with little displacement of residents and relatively small environmental effects.

It is proposed that INCaF purchase the projects’ emissions reductions, estimated at 95,000 tons per year, for a value in the range of US$5 million to US$6 million through 2012. IFC commissioned the Stucky consulting firm of Switzerland to perform technical, environmental, social, and health and safety reviews of the projects.

Anhui Kangyuan Electric Power

Also up for IFC board action in late October is a proposal to support Anhui Kangyuan Electric Power Group Co. Ltd., which is developing nine hydro projects totaling 88.8 MW in China’s Anhui Province. The run-of-river plants are 1.3-MW Jijia on the Toutuo River, 6.4-MW Kuotan on the Huangwei River, 25-MW Liubo on the Yanzihe River, 3.2-MW Shenhe on the Huangwei, 6.4-MW Tianmaqiao (river not listed), 2.5-MW Tieqianghe on the Qianshui River, 12-MW Yanjia on the Huangwei, 4-MW Yanwan on the Wanhe River, and 28-MW Zhengjiawan on the Taiyanghe River.

The Kangyuan projects are in various stages of development with on-line dates ranging from August 2007 to December 2008. Also located in narrow, steep-sided valleys, the projects are to have small reservoirs with little displacement of residents and relatively small environmental effects.

It is proposed that INCaF purchase the projects’ emissions reductions, estimated at 177,000 tons per year, for a value in the range of US$9 million to US$10 million through 2012. Stucky also was commissioned to perform technical, environmental, social, and health and safety reviews of the Kanyuan projects.

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