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Carbon Fund for Africa

Volume 451: debated on Monday 30 October 2006

To ask the Secretary of State for Environment, Food and Rural Affairs if he will make a statement on progress made in developing a carbon fund for Africa. (92476)

The second meeting of the parties to the Kyoto Protocol in Nairobi, this November, presents an ideal opportunity to explore how Africa’s participation in investment in projects through the Clean Development Mechanism (CDM) can be enhanced. There are several alternative proposals on the table for discussion in Nairobi, and the UK is keen to see a positive outcome.

The CDM market has grown enormously in the last year, with an estimated 1,000 projects, and 1.2 billion tonnes of CO2 equivalent in the pipeline to 2012. The UK is the major private sector participant in the CDM market, with UK companies participating in some 25 per cent. of currently registered CDM projects.

Africa does not have a record of attracting significant private investment in the CDM, so the Government are arguing for the development of a fund which could assist in building capacity within Africa to develop and identify projects that could attract carbon finance. I am discussing the idea with colleagues from within the EU as well as from Africa. In parallel, I have asked officials to examine how a carbon fund for Africa could be best designed to deliver on this objective.

The challenge is to ensure that any fund is designed to deliver long-term benefits to the countries concerned. As well as pressing the fund we need to look at the full range of measures to support and enhance Africa’s participation in the CDM.

There is already considerable international experience of support for CDM-related investment.

The UK already supports several initiatives that assist African participation in CDM:

The Foreign and Commonwealth Office’s Global Opportunities Fund supports many projects designed to enhance developing countries’ capacity to participate in CDM. There are several projects supporting CDM investment in Africa; in Angola, Nigeria and South Africa.

As a Government, we are also investing in the Kuyasa township CDM project in Cape Town, South Africa, to offset the emissions of the G8 presidency. I hope that we can build on this investment in the tender for the Government Carbon Offsetting Fund which we have set up to offset emissions from official travel.

There are also several existing multilateral, European and bilateral initiatives on support capacity building and project investment, agreed at a United Nations Framework Convention on Climate Change level, through the World Banks and bilaterally. This is something we need to learn from and build on.