Using Carbon Finance to Promote Sustainable Energy Services in Africa (CF-SEA)

A joint UNEP-World Bank initiative, Carbon Finance for Sustainable Energy in Africa (CF-SEA), has started in Cameroon, Ghana, Mali, Mozambique and Zambia.

Since its launch in May 2005, teams have been working with host government agencies, banks and project sponsors to develop an initial pipeline of CDM investment opportunities some of which the World Bank hopes to finance through its Community Development Carbon Fund.

In all countries, particular interest has been manifested by local waste management operators, local and international hydro- and bioenergy project developers and local banks. Thanks to the joint efforts of local NGOs, project sponsors, international and local consultants, significant progress has been made in the identification and development of carbon project opportunities.

CF-SEA - The Programme Rationale
There is a pressing need to bring together the different experts, financiers and authorities needed to trigger CDM project activities in Sub-Saharan Africa. To address this deficit, CF-SEA is targeting African countries that offer sensible prospects for implementing a number of CDM projects within a reasonable timeframe.

In each of the target countries, the programme is working with a number of project developers to identify, prepare and take to market specific carbon projects, and strengthen the capacity of local carbon experts, co-financiers and governmental authorities to engage in CDM activities.

CF-SEA - The Dual-Track Project Schedule

Track 1 - Capacity Development for CDM
At the outset of programme activities, country teams identified potential local and regional intermediaries, institutions and experts and assessed their capabilities to bring deals to the market through desk- and field work.
Then hands-on training and capacity-building was provided to institutions/experts through technical training courses, field trips, web-based training and project development workshops.
Capacity development activities were modular and responded to the existing capacities and capacity-gaps of each organisation/ expert. Most importantly, technical training was provided to public sector experts who were mandated by the UNFCCC to designate a national authority. The training programme then focused on improving the ability of Designated National Authorities (DNAs) to secure a smooth and timely evaluation- and approval process for CDM projects, and act as enabling intermediary between project sponsors, certified emission reduction (CER) buyers, financial institutions and involved interest groups.

Track 2 - Targeted Technical Assistance for Project Preparation
In most countries, the programme has entered the Track 2 stage, or the "learning by doing" component of the programme, where experienced international carbon-consultants are providing the technical expertise, and financial engineering needed to successfully bring Project Idea Notes (PINs) and Carbon Finance Documents (CFDs) forward. In close collaboration with local partners, the CDM specialists are helping to move CDM proposals through the due diligence, documentation and validation processes, and liaise with the various governmental, financial and operational actors needed to move projects to financial closure.
For each selected country, the consultants are working with local project sponsors and project developers to assess the potential for projects including such technologies as landfill gas, biomass-valorisation, mini-hydro, energy efficiency, etc. The consultants are helping developers gather all information needed for a PIN and a CFD and are making suggestions as to how the project may be adjusted. The consultants are also looking at how projects can be bundled if they are too small by themselves and provide help on other critical issues such as financial analysis and financing gaps to be filled.

Implementing Agencies
Programme implementation and management is being carried out jointly by UNEP Division of Technology, Industry and Economics (DTIE), the UNEP RISOE Centre, and the World Bank's Community Development Carbon Fund (CDCF). Project funding is provided through contributions from the UN Foundation and the CDCF.

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