Genesis Morocco: Fonds Capital Carbone Maroc (Moroccan Carbon Capital Funds)


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Genesis Morocco

Project Genesis is a strategic sustainable development framework for Morocco to translate from being a net importer of energy and a country facing water shortage issues, into the number one producer both of clean renewable energy and water in the region.

Tuesday, March 20, 2012    <<Home

Fonds Capital Carbone Maroc (Moroccan Carbon Capital Funds)


Personal Notes :  Morocco has yet to take full advantage of CDM's. The 26 millions euro's of the fund is too little, but not too late.


Indeed Morocco's potential lies not only in exports, but also in being a prime destination for carbon offsets. Cost competitiveness is key in such mechanisms, and Morocco has got a lot going for it cost competitiveness wise compared to other carbon offset destinations. 


Morocco should definitely grow its portfolio of CDM's way beyond this initial figure of 26 millions.


The beauty of it is that it opens the door to an international market, where Moroccan carbon credit should look attractive. Definitely room to grow, at least tenfold, and a solid mechanism right there to finance the ramping up of our renewable energy and energy efficiency infrastructure. It has to be used to its full potential.


Right not its not, Morocco's share of CDM's is not what it should be, and anything valued less than 100 million dollars is not a player on a global market.  A redimensioning of the fund up to 2 Billions MAD, roughly 230 Millions USD, is attainable & highly desirable.


On the upside, this fund is an African leader, and one of the many areas where Morocco distinguishes itself with a pioneering approach.


Beyond are the initial press release about the fund which is a CDG Capital equity fund, as well as a snapshot by climatefinanceoptions.org

Casablanca, Bad Vilbel – Frankfurt, Paris, October 25th 2010

Within the framework of the Clean Development Mechanism (CDM) of the Kyoto Protocol, a consortium consisting of ORBEO, Fonds Capital Carbone Maroc (FCCM) and the Post 2012 Carbon Credit Fund (P12, advised by First Climate), today announced the signature with the Moroccan utility Office National de l’Electricité (ONE) of a 2 million tonnes CO2e Emission Reduction Purchase Agreement active until 2018.

Carbon credits will be issued by a 140 MW wind power project, the largest operational wind farm in Africa, located in the heavily winded area of Tangiers in North Morocco. The project has been operational for one year and is part of the Moroccan government’s renewable energy program.

The consortium will manage this carbon credit programme following an international tender process launched by the ONE for the sale of carbon credits.

Under this agreement, the Consortium will manage the project’s registration process under the United Nations Framework Convention on Climate Change (UNFCCC), and will purchase the pre and post-2012 Certified Emission Reductions (CERs*) coming from the project.

Azzedine Khatami, Strategic Project Manager at ONE, comments on the timing of the ERPA: “The wind farm project is very successful; its completion represented an important milestone on Morocco’s way towards a larger share for renewable energy. We cannot rest on our laurels, though, loans need to be repaid and given the uncertainty about the post-2012 period, the ONE decided to sign the ERPA for the pre and post-2012 CERs. The consortium’s bid was the best fit for us.”

Laurent Valiergue, Origination Director at ORBEO, adds: “ORBEO is proud to have acted as a designer of this deal, by bringing together different capabilities, especially in term of risk management associated to post 2012 CERs. This excellent cooperation has led to minimize the risks while maximizing the revenues for ONE. This deal shows we are willing to support the future of mechanisms which contribute to the fight against climate change”.

Laurent Valiergue, Origination Director at ORBEO, adds: “ORBEO is proud to have acted as a designer of this deal, by bringing together different capabilities, especially in term of risk management associated to post 2012 CERs. This excellent cooperation has led to minimize the risks while maximizing the revenues for ONE. This deal shows we are willing to support the future of mechanisms which contribute to the fight against climate change”.

Urs Brodmann, Executive Board Member of First Climate who acts as Investment Adviser to the Post 2012 Carbon Credit Fund says: "This transaction is a flagship investment for the Post 2012 Carbon Credit Fund, whose mission is to help bridge the period of uncertainty until a successor regime to the Kyoto Protocol comes into place. It underlines the growing importance of Africa as a place for carbon investments. We are also particularly pleased about the synergies created with the European Investment Bank, German KfW and the Spanish ICO, all of whom were already involved in the financing for some of ONE’s projects and are also investors in the Post 2012 Carbon Credit Fund."

Simon Brooks, European Investment Bank Vice President responsible for renewable energy said “The European Investment Bank has supported the Tangiers wind farm through a EUR 80m loan and been engaged with the Post 2012 Fund since 2008. We strongly support the Moroccan government’s long term goal of using renewable energy to improve energy security and encourage sustainable development. This deal demonstrates confidence in the flagship project post-2012.” Hassan Laaziri, CEO of the FCCM asset manager CDG Capital Private Equity, states: “FCCM is glad to be part of this deal; we are very confident in the future of the Moroccan carbon market and hope to sign other contracts very shortly. By purchasing carbon credits, FCCM is committed to help the development of CDM projects in the country and make Morocco one of the African leaders in this field”.


(*) The Clean Development Mechanism (CDM) is one of the "flexibility" mechanisms defined in the Kyoto Protocol (IPCC, 2007). It is defined in Article 12 of the Protocol, and is intended to meet two objectives: (1) to assist parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC), which is to prevent dangerous climate change; (2) to assist parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments (greenhouse gas (GHG) emission caps). "Annex I" parties are those countries that are listed in Annex I of the treaty, and are the industrialized countries. Non-Annex I parties are developing countries. Objective (2) is achieved by allowing the Annex I countries to meet part of their caps using "Certified Emission Reductions" (CERs) from CDM emission reduction projects in developing countries. This is subject to oversight to ensure that these emission reductions are real and "additional." The CDM is supervised by the CDM Executive Board (CDM EB) and is under the guidance of the Conference of the Parties (COP/MOP) of the United Nations Framework Convention on Climate Change (UNFCCC)

ORBEO ORBEO, www.orbeo.com, is the joint-venture between Rhodia and Société Générale that combines industrial, environmental and financial expertise dedicated to greenhouse gas emission reductions. From project to market, ORBEO covers the whole carbon value chain. ORBEO is among the leading participants of the CO2 markets and a recognised developer of greenhouse gas emission reduction projects. With the takeover of OneCarbon International BV in 2009, ORBEO benefits from an extensive portfolio of high quality emission reduction projects, and a widened geographic presence. Combined with its trading and marketing skills, the company offers its clients a wide range of innovative and diversified products and services. ORBEO is a Financial Institution regulated in France by CECEI.

First Climate First Climate, www.firstclimate.com, is advisor to the Post 2012 Carbon Credit Fund and one of Europe’s leading carbon asset management companies. With offices on four continents and more than ten years’ experience in the market, it is one of the few intermediaries to cover the entire carbon credit value chain. First Climate develops, finances, and implements CDM, JI, and VER projects, purchases the resulting carbon credits, and customizes trading solutions for companies subject to the EU ETS. As investment advisor to several institutional investors, First Climate structures and develops carbon funds and related products. In the voluntary market, the company provides VERs verified according to the highest international standards.

ONE The Office National de l’Electricité, www.one.org.ma, is the major actor of the Moroccan electricity sector. It is a public owned industrial and commercial establishment created in 1963. In order to meet the challenges and to control our energy future in the objective of ensuring sustainable development in Morocco, a new energy strategy was elaborated on the basis of technological and economical options. These strategic objectives aim at: insuring our energy supply security, warranting availability and accessibility of energy at best costs, reducing our energy dependence by diversifying energy sources, developing national energy potential and promoting energy efficiency. The options of this strategy concern the whole sector: electricity, renewable, organizational reforms…

P12 The Post 2012 Carbon Credit Fund was launched in 2008 as the first fund to purchase CERs generated after 2012 with the express intention of stimulating a market in post-2012 CERs. Backed by the European Investment Bank, Caisse des Dépôts, Instituto de Crédito Oficial, KfW Bankengruppe and the Nordic Investment Bank, the Fund has proven to be a very attractive buyer among project developers worldwide. This has allowed First Climate, Investment Advisor and Conning Asset Management, Investment Manager of the Fund to put together a portfolio of outstanding CDM projects that have passed the rigorous risk assessment and due diligence analyses put in place. The Fund is now offering parts of its portfolio to interested buyers.

FCCM Fonds Capital Carbone Maroc, is the first carbon fund in African French speaking countries. It was initiated by Caisse de Dépôt et de Gestion of Morocco (CDG) in 2007, followed by CDC Climat and European Investment Bank (EIB) in 2008. The Fund aims at purchasing carbon credits issued by Moroccan projects in several sectors such as: energy efficiency, renewable energies and waste management. The Fund is managed by CDG Capital Private Equity, one of the Moroccan leading asset management companies, managing over 80 millions euros of assets.

Contacts

ORBEO
Cecile Fages
Head of Communications
Tel.: +33 1 5898 2571
Fax: +33 1 5898 2741
E-Mail: cecile.fages@orbeo.com

First Climate
Fritz Wilhelm
Head Corporate Communications
Tel.: +49 (0)6101 - 5 56 58 - 34
Fax: +49 (0)6101 - 5 56 58 - 77
E-Mail: fritz.wilhelm@firstclimate.com

ONE
Azzeddine KHATAMI
Strategic Project Manager
Tel.: +212 5 22 66 81 67
Fax: +212 5 22 43 31 41
E-Mail: khatami@one.ma

FCCM
Hassan Laaziri
CEO of CDG Capital Private Equity
Tel.: +212 5 22 98 13 91
Fax: +212 5 22 98 95 66
E-Mail: hlaaziri@cdgcapital-pe.ma



Snapshot

Total Amount MAD 300 million (+/- EUR 26 million)
Financing Mechanisms Carbon finance
Qualifying Projects Mitigation, Energy , Energy Efficiency , Forestry , Fuel Switching , Fugitive Methane , Renewable Energy , Waste Management
Eligibility Limited exclusively to projects located in Morocco


Funding Objectives

The purpose of the Fund is to purchase primary carbon credits generated by projects in Morocco over the period 2008-2017 under the Clean Development Mechanism (“CDM”) and to resell these credits on the secondary market (globally). The Fund is one of the very first examples of carbon funds created in and focused on a developing country.

The objective of the Fund is to promote (i) investment in key sectors such as renewable energy, landfill management and energy efficiency, and (ii) the use of the CDM in the region.

The Fund is owned (50%) by Morocco’s Caisse de Dépôt et de Gestion (CDG) with the remaining shares belonging to the European Investment Bank (25%) and France’s Caisse des Dépôts et Consignations (25%).


Financing Mechanisms

The Fund has capital equivalent to MAD 300m (+/- EUR 26m). It targets projects for which the CDM Project Design Document (“PDD”) forecasts a minimum carbon emissions reduction of 30 000 tonnes a year, with the proviso that the Fund may invest in up to two projects where their PDD forecasts a carbon emission reduction of at least 15 000 tonnes a year, these being regarded as small-scale projects unlikely in principle to interest the international funds.

The Fund intends to invest in a maximum of 6 to 10 projects, with priority being given to wind, biogas and hydroelectric power projects. For each project, the Fund will have to be (i) either the lead investor, (ii) or co-lead investor, subject in the latter case to the Fund receiving at least 40% of the carbon credits. In addition, the Fund endeavours as far as possible to spread the risks by investing in different sectors of activity:

70% in renewable energy sources
30% in other sectors


In addition, the Fund’s main investment strategy is as follows:

A minimum of 70% of the Fund’s portfolio to be invested in carbon credits generated during the Kyoto 1 period, and accordingly a maximum of 30% of the emission reduction to be post-2012 vintage (Kyoto 2);
A maximum investment of the equivalent of 50% of the capital of each promoter and a maximum of 30% of the committed capital for a single project;

The acquisition price, to be negotiated with the local promoters, will be based on a pre-agreed pricing formula;

Advance payments to the promoter’s underlying project are possible, but limited to 20% of the underlying acquisition price and can only be granted to counterparts with a minimum rating of BBB+.


Application Procedures


Project promoters are invited to contact the Fund Manager, ACASA (Accès Capital Atlantique S.A.).



Contact


ACASA (Accès Capital Atlantique S.A.)
aca@acasa.ma
(+212) 522 98 13 91


Genesis Morocco : http://genesismorocco.blogspot.com