Investment into production efficiency brings benefits for Ivano-Frankivsk Cement
The Multilateral Carbon Credit Fund (MCCF) has agreed to purchase carbon credits from JSC Ivano-Frankivsk Cement (IF Cement) plant during the period from 2008 to 2012. The emission reduction purchase agreement (ERPA) was established by the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) and negotiated by GreenStream Network Plc.
IF Cement which will generate the carbon credits is one of the last Ukrainian-owned cement producers and a major regional employer. The company will produce carbon credits by employing efficiency measures at their plant, including:
- the installation of high-efficiency dust collectors, reducing dust by two-thirds
- the introduction of water recycling, reducing consumption by 80%
The efficiency project amounted to a total of USD 80 million which is jointly financed by the State Export - Import Bank of Ukraine (UkrEximBank) and the EBRD through an Energy Efficiency Programme (UKEEP).
In addition to the project's primary goal of contributing towards combating climate change, the project also supports the ‘Energy strategy of Ukraine until 2030' which aims to reduce emissions of sulphur oxides (SOx), nitric oxides (NOx).
Moreover, Ukrainian cement consumers are expected to benefit indirectly from the project thanks to from lower prices associated with increased capacity and competition between cement producers. The project will also represent Best Available Technology (BAT) for the cement industry.
The expected emission reduction units (ERUs) are credits generated via the Joint Implementation (JI) flexible mechanism, defined under the Kyoto Protocol, which aims to lower the cost of emission reductions. JI is a market-based approach for addressing climate change, specifically designed for cooperation between countries that both have binding emission reduction targets (Annex I countries).
IF Cement has received an endorsement letter from the Ukrainian National Environmental Investment Agency, which is an important first step towards qualifying the project as a JI project.
Multilateral Carbon Credit Fund (MCCF)
Launched by the EIB and EBRD in December 2006 and fully subscribed, with €190 million in commitments, the MCCF is one of the few carbon funds specifically dedicated to helping countries from Central Europe and Central Asia. The MCCF includes six private (CEZ, Endesa, Gas Natural, PPC, Union Fenosa and Zeroemissions) and six sovereign participants (Finland, Belgium (Flanders), Ireland, Luxembourg, Spain and Sweden).
European Investment Bank (EIB)
The EIB is the European Union's long-term lending bank, promoting European objectives. Established in 1958, it operates within the 27 EU Member States and in more than 130 countries outside the EU. One of the EIB's priority objectives is the protection and improvement of the environment, which accounted for 38 percent of EIB loans within the EU-27 in 2007.
European Bank for Reconstruction and Development (EBRD)
The EBRD, owned by 61 countries and two intergovernmental institutions, aims to foster the transition from centrally planned to market economies in countries from Central Europe to Central Asia. Visit the EBRD's website: www.ebrd.com
This deal was negotiated by GreenStream Network Plc., the Carbon Manager for MCCF in Russia, Ukraine, Belarus and Kazakhstan. GreenStream is a leading Northern European developer and manager of green investment vehicles, basing its excellence on a variety of advanced advisory and intermediary services. Visit their website: www.greenstream.net
JSC Ivano-Frankivsk Cement
As one of the last Ukrainian-owned cement producers, JSC Ivano-Frankivsk Cement, is a major regional employer, further justifying the efforts to improve IF Cement's viability and competitiveness.
UkrEximBank is a leading Ukrainian financial institution which provides project finance and export support to the corporate sector of Ukraine. Visit their website: www.eximb.com/eng/