Wednesday, June 20, 2012

(BN) World Bank Unit Winds Up Post-2012 Carbon Credit Fund

June 20 (Bloomberg) -- The World Bank Group's International Finance Corp. will close its fund for investing in projects that generate emissions credits from 2013, after the first period of the United Nations' Kyoto Protocol ends.

The IFC suspended its Carbon Facility Fund about seven months ago after it had raised 150 million euros ($191 million), as plummeting UN offset prices triggered a measure to protect developing-nation projects supplying the credits.

"Following a decline in carbon prices, the facility is not able to offer a structure that allows for value to both participants and project developers," Alexandra Klopfer, a spokeswoman for IFC in Washington, said yesterday by e-mail. "The participants decided in May 2012 that the facility will not make any new commitments."

The fund will continue to support the one project it committed to in July 2011, Klopfer said. The IFC will fund renewable energy and low-carbon growth using its own funds and donations, she said.

JPMorgan Chase & Co, Royal Dutch Shell Plc, and Mercuria Energy Group Ltd. are among investors that committed to the fund, which was to provide credits that may be eligible for use in the European Union carbon market.

United Nations carbon prices lost 67 percent in the past year as industrial production stagnated and climate talks struggled to achieve progress on reaching a global agreement to reduce carbon emissions.

UN carbon credits for delivery in December fell 2.6 percent to 3.77 euros a metric ton on the ICE Futures Europe exchange in London at 2:50 p.m.

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