Temasek-backed decarbonisation platform to explore investing in Rwanda’s carbon projects
The initiatives are expected to cover both carbon reduction and removal activities whitelisted by the African country for Article 6
DECARBONISATION-FOCUSED investment platform GenZero will be looking to invest in carbon projects in Rwanda, as part of a collaboration agreement with the country’s climate financing vehicle and environment authorities, as well as carbon standards body Gold Standard.
The agreement, which was inked on Thursday (Sep 19), is aimed at developing a pipeline of carbon projects in Rwanda that is compliant with a Paris Agreement framework governing the international trading of carbon credits known as Article 6.
“This pioneering partnership between a government, a standards-setting body, and an investor reflects the shared commitment of the partners to catalyse international investment in high-integrity Article 6 projects in countries such as Rwanda, while generating sustainable development benefits for the local economy, environment, and communities,” read the joint media release by all signatories.
Article 6 establishes a carbon accounting mechanism known as “corresponding adjustment”. Carbon credits that come with corresponding adjustments mean that the emissions being offset are only counted once by the country that bought the credits, while the country that produced them would give up the right to use the credits to meet their own national climate targets. This is to avoid the double counting of underlying emissions reductions or removals when carbon credits are traded.
The government of Rwanda and GenZero will be screening projects before sending successful ones to Gold Standard for certification.
These projects should meet the criteria under Rwanda’s National Carbon Market Framework, as well as the investment parameters set out by GenZero. The investor will also assess the commercial viability of proposals based on their mitigation potential, project maturity and financial returns.
A NEWSLETTER FOR YOU
Friday, 12.30 pm
ESG Insights
An exclusive weekly report on the latest environmental, social and governance issues.
Eligible projects will need to utilise Gold Standard’s methodologies and comply with the certification body’s requirements.
“The projects under the collaboration agreement are expected to cover both carbon reduction and removal activities that are whitelisted by the Rwanda government for Article 6. These projects could deliver biodiversity, environmental, health, and other sustainable development benefits. They will also help to enable job creation and stimulate the green economy,” read the release.
This agreement comes after the governments of Singapore and Rwanda signed a memorandum of understanding (MOU) to collaborate on carbon credits on the sidelines of the United Nations climate change conference last year in Dubai. The MOU would pave the way for a possible implementation agreement between Singapore and Rwanda, which sets out a bilateral framework for the international transfer of correspondingly adjusted carbon credits between both countries.
Singapore so far has signed only two implementation agreements – one with Ghana, and another with Papua New Guinea. But it has substantively concluded implementation agreements with Bhutan, Paraguay and Vietnam.
Only carbon credits from countries that have signed an implementation agreement with Singapore are on the eligibility list under its International Carbon Credit framework and able to be bought by corporates looking to offset part of their liability under its carbon tax. These credits may also be used to offset Singapore’s national emissions.
Copyright SPH Media. All rights reserved.
