MCCF to purchase carbon credits from group of ten small hydropower plants

PanARMENIAN.Net - The EBRD-EIB Multilateral Carbon Credit Fund (MCCF) has agreed to buy carbon credits from a group of ten small hydropower plants in Armenia, bundled into a single project under the Clean Development Mechanism (CDM) framework.

The EBRD is working together with Ameriabank CJSC, one of the largest banks in Armenia with a leading position in Armenia’s energy financing, whose role is to aggregate the resulting emissions reduction units. In 2010 Ameriabank has completed the introduction and implementation of the Environmental and Social Management System.

With the support of the EBRD’s Armenian Renewable Energy Program, under which the Bank provided $7 million to Ameriabank CJSC (legal successor of Cascade Bank CJSC) for on-lending to local Armenian companies, Ameriabank has financed the development of the hydropower stations participating in the transaction. Out of 149 small hydro power plants in Armenia, Ameriabank has financed 27 with a total capacity of around 60 megawatts.

Out of the ten mini hydro power stations participating in the transaction, seven are run-of-river plants and three plants are constructed on artificial water flows, each with electric capacity below 3.6 megawatts.

The plants are bundled into a single project under the CDM framework in order to enable them to benefit from the international emission trading market and reduce transaction and documentation costs.

The transaction is in line with Armenia’s sustainable development goals and will help the country to increase its volumes of renewable energy. The project will also raise Armenia’s energy security by reducing its reliance on energy imports and improve the supply of electricity in rural areas where most of the plants are located.

The project contributes to global climate change abatement efforts, by offsetting more carbon-intensive electricity production from the Armenian electric grid.

The emission reduction purchase agreement (ERPA) for the sale and purchase of certified emission reductions (CERs) to be generated by the ten hydropower plants was signed between Ameriabank CJSC and Stichting Carbon Purchase Intermediary (CPI), a special purpose vehicle created to acquire carbon credits for the participants in the MCCF.

This ERPA is the second of its kind to be executed under the MCCF in Armenia and was negotiated by ICF Consulting Ltd., acting as Carbon Manager for MCCF in the Western-Balkan, Caucasus and Central Asia regions.