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The World Bank, in collaboration with the International Emissions Trading Association (IETA), created a new fund to provide carbon finance through the Clean Development Mechanism (CDM). The
Community Development Carbon Fund (CDCF) links small-scale projects seeking carbon
finance with companies, governments, foundations, and NGOs seeking to improve the livelihoods of
local communities and obtain verified emission reductions (ERs).
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The Fund Manager will develop a project portfolio with the intention that during the term of the Fund:
- CDCF projects will be located exclusively in developing countries that are Parties to the UNFCCC and are not included in its Annex I (non-Annex I Parties). The CDCF will not support projects in Annex I Parties.
- No more than 10 percent of the first tranche of the CDCF capital will be committed to projects located in the same country.
- A distinct criterion for CDCF project selection will be the generation of benefits for poorer communities in developing countries. The development outputs that are expected to generate such community benefits will be documented by entities independent from the CDCF.
- The CDCF management will work to achieve the goal of placing at least 25 percent of the first tranche of funds in projects located in LDCs and other poor developing countries.
- For the purpose of the CDCF, “LDCs and other poor developing countries” are defined as follows:
- Countries listed in the World Bank’s International Development Association or “IDA” list of countries;
- Countries commonly referred to as “IDA blend”, including those IDA countries that have a population of less than 75 million; or
- Countries designated as LDCs by the United Nations.
- The CDCF will also endeavor to support small-scale projects in countries other than LDCs and other poor developing countries, so long as these projects will directly benefit poorer, rural communities of such countries.
- Up to approximately 10% of the CDCF capital may be committed to small-scale projects in the afforestation and reforestation areas.
- CDCF projects will comply with the criteria for CDM project activities under Article 12 of the Kyoto Protocol and provisions adopted thereunder, in order to be eligible to generate certified emission reductions under the CDM. Preference will be given to projects that are compatible with the definition of “small-scale CDM project activities” in accordance with decision 17/CP.7. Adopted by the Conference of the Parties to the UNFCCC at its seventh session and concerning the modalities and procedures for a clean development mechanism and the facilitation of its prompt-start. See http://unfccc.int/cdm/cop.html.
- CDCF projects will conform to policies and guidelines set by the World Bank Group for development projects. They will also comply with all Safeguards Policies of the World Bank Group.
Scale of Illustrative Projects
for the CDCF
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Project Type(examples only, many other options
feasible)
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Scale of Energy Service
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Typical Total Project Financing
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Typical Carbon Purchases over 10-14 years, nominal
terms
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Mini-Hydropower
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1-15MW
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$1-30 million
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$100,000-$2.0 million
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Micro-Hydropower
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100W-1MW
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$100,000 - $2 mm
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$10,000 - $150,000
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Wind Power
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400W - 15 MW
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$200,000 - $15 mm
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$5000 - $2.0 mm
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Wood Waste Heat and Power in Wood Processing
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1-15 MW
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$500,000 - $10 mm
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$100,000 - $5.0mm
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MSW to Energy
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500W-15MW
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$500,000 - $20 mm
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$100,000 - $10 mm
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Sugar Cane Bagasse Power and Heat
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5MW-15MW
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$2mm - $15 mm
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$ 200,000 - $5mm
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Crop Residue to Power (Rice and Coffee Husks etc)
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1MW - 15MW
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$1mm - $10 mm
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$100,000 - $5 mm
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Agroforestry
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1000 - 5000 ha
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$100,000 - $1 mm
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$100,000 - $2 mm
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Reforestation
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500 - 5000ha
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$50,000 - $5 mm
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$50,000 - $5mm
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