INNOVATIONS IN THE PRIVATE SECTOR RESPONSE

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INNOVATIONS IN THE PRIVATE SECTOR RESPONSE TO
CLIMATE CHANGE AND THE AFRICAN CARBON MARKET
DEVELOPMENT Lloyd Chingambo Seventh African
Development Forum Addis Ababa. Ethiopia October
15, 2010
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The Big Question

• Private sector as viable partner in dealing
  Africas climate change agenda

Africa Carbon Credit Exchange Telephone
260-1-238473/2 www.africACCE.com
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The Current Position

• Africa has little or no access to finance
• Private sector remains on the sidelines
• Domestic financial sector does lending to
  climate change projects
• Little or no support for climate change
  investments
• Absence of legal framework to support and
  protect climate change investments
• Little attempt to use what funds, as are
  available, to unlock more funds for climate
  change
• No real attempts to create/generate funds for
  climate change
• Little appreciation of the interlocking
  relationship between Climate Change and
  Development.

Africa Carbon Credit Exchange Telephone
260-1-238473/2 www.africACCE.com
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Key Problems of the African Carbon Market

• 1. LACK OF FINANCE
• Lack of project finance opportunities stifle
  low carbon project development
• 2. LACK OF KNOWLEDGE
• Lack of awareness, knowledge and competencies
  to leverage global carbon market at all
  levels (governments, private sector,
  financial sector, project developers, etc).
• 3. LACK OF BASELINE METHODOLOGIES
• Much of Africas economic activities are
  agro-forestry based.

Low Carbon Africa
Africa Carbon Credit Exchange Telephone
260-1-238473/2 www.africACCE.com
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Crafting Problem Specific African Solutions
Commercial Interest in Low-Carbon Projects
Project and Carbon Finance
Low-Carbon Project Development
Carbon Credit Trading
Awareness and Sensitization
Enabling Policy Environment
Access to Knowledge
Access to Finance
Trading Platform
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The Unique Design of ACCE
Africa Carbon Credit Exchange Unlocking Low
Carbon Africa
Access to Knowledge The Green Knowledge Institute
Access to Finance Low Carbon Africa Fund
Portfolio
Trading Platform A Transparent and Structured
Marketplace
PROJECT PIPELINE DEVELOPMENT
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Facilitate Access to Finance
Lloyds (Fund Manager)
Offshore Investors

• Mandate
• Facilitate the development of innovative
  instruments and financing structures thereby
  unlocking finance to catalyze low carbon project
  growth in Africa.
• Develop financing structures which would offer
  different risk profiles to unlock both the
  private sector and the domestic financial sector.
• Facilitate financial access and market
  development for project promoters including the
  smallholder farmer
• Facilitate appropriate green technology transfer
  to Africa.

Co-Fund Manager
Zambian Investors
LOW CARBON AFRICA FUND
GTCEF
AMGF
LCAF 1
WEF

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Green Technology Credit Enhancement Fund
Green Technology Credit Enhancement Fund
Stage 1. ACCE Undertakes Evaluation and
Engineering of Primary Securities.
Stage 2.a. With Better Presentation of
Securities, Some Clients Go Straight to the
Lender.
ENHANCED SECURITIES

INDIVIDUAL IMPORTER
Banks
LIQUID ASSETS
Private Equity Funds
TANGIBLE ASSETS
Stage 2.b. Less Secure Clients will access
components of the GTCEF
Public Bodies
Development Banks
OFF-TAKER AGREEMENTS
CREDIT ENHANCEMENT FUND
EQUIPMENT
Govt.
ENHANCED SECURITIES
POLITICAL RISK INSURANCE
SYNDICATE OF IMPORTERS
CASH GUARANTEE
CARBON CREDITS
International Funds
LIABILITY INSURANCE
PROPERTY INSURANCE
TECHNOLOGY TRANSFER INCENTIVE FUND
Stage 3. Provision of Climate Change Technology
Transfer Funding
TRADE INSURANCE
Income Donor Agencies
Income Money Market
Income Investors
FINANCE TERMS
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The Mechanization Guarantee Fund

• Strategic Aims of the Fund
• Facilitate mechanization of rural agriculture
• Facilitate improved production and yields for
  the rural Farmers
• Mobilise and secure finance for purchasing
  equipment
• Increase technical support to rural farmers
• Facilitate the development of sustainable and
  lower carbon footprint rural agricultural
  practices.

Africa Carbon Credit Exchange Telephone
260-1-238473/2 www.africACCE.com
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Facilitating Access to Knowledge Green Knowledge
Institute (GKI)

• Strategic Aims of the Institute
• Knowledge Hub for carbon market development in
  Africa
• Information Sharing Hub for African Designated
  National Authorities (DNAs)
• Facilitate the development of African
  appropriate carbon methodologies
• Deal with issues of sensitization and capacity
  building issues (e.g., governments, public
  and private sectors, NGOs, and private sector
• GKI is developing into a Bureau for connecting
  required technical expertise to develop carbon
  offset projects.

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The Trading Platform

• A Transparent and Structured Marketplace
• ACCE is building a regulated trading platform
  on which market players can buy and sell
  credible compliance and voluntary carbon credits
  generated in Africa
• It provides a transparent price discovery
  mechanism is essential for African project
  developers to realize market value for carbon
  credits
• Through a network of Brokers and local
  partners across Africa ACCE will provide a
  medium for transaction, clearing and supporting
  structures to facilitate climate change/carbon
  projects.

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Network of Brokers across Africa
Network of Brokers

• Scaling up to
• Africa

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Partners
INSTITUTION TYPE OF SUPPORT
1. USAID/PROFIT Initial Financial Support Technical Assistance
2. NORAD Conservation Farming, Initial capitalizations into Green Tech. Credit Enhancement Fund, Mechanization Credit Guarantee Fund
3. DANISH GOVT. Funding the p-CDM activities
4. WORLD BANK/IFC Conservation Farming, Green Knowledge Institute.
5. UNEP Risoe Green Knowledge Institute.
6. QUEENS UNIV. CANADA Development of Futures Market on the Trading Platform.
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Partners
INSTITUTION/GOVT. TYPE OF SUPPORT
7. AFREXIM BANK Line of Credit Carbon Credit Delivery Guarantee Fund ACCE contracted to be Afrexim Bank CDM Project implementation Advisor Afrexim Bank to finance ACCE CDM project book.
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CONTACT DETAILS AFRICA CARBON CREDIT
EXCHANGE 4th Floor, Godfrey House. Kabelenga
Road. P.O. Box 390035 Lusaka. Zambia lchingambo_at_a
fricacce.com skhan_at_africacce.com Website
www.africACCE.com Telephone [phone]