IIFC launched its Post-2012 Carbon Facility in Cancun in Dec 2010. This €150 million Facility helped address post-2012 market uncertainty faced by climate-friendly projects eligible under the Kyoto Protocol’s Clean Development Mechanism (CDM) by creating a pathway to market. Currently such projects have few means of obtaining revenues for carbon reduction due to the expiration of the Kyoto commitment period at the end of 2012. IFC manages the Facility, participating with up to €15 million for its own account and mobilizing close to another €135 million in funds from EU-based power utilities and other energy companies. Funds will be used to forward purchase emission reduction credits produced by IFC client companies and projects financed by IFC’s client banks until 2020. Project companies will benefit as future carbon revenues can be used to leverage current financing needs.
IFC also offers innovative debt financing to projects that rely on carbon revenue from sale of post-2012 carbon credits to bankable buyers. By monetizing firm carbon offtake agreements, IFC helps projects reach financial closure despite few or no fixed assets and substantial dependence on future generation of emission reduction credits.
