November 23, 2011 – Bank of America Corp. (BAC) agreed financing for an emissions-cutting project to sell cooking stoves and fuel in Mozambique, potentially eating into the sub- Saharan region’s $10-billion charcoal market.
Under the agreement, Bank of America Merrill Lynch has bought an option at an unspecified price to purchase and market United Nations-overseen Certified Emission Reduction credits that each represent a metric ton of carbon dioxide equivalent, Abyd Karmali, the London-based global head of carbon markets at the bank, said today in a telephone interview.
The reductions would be created by the African country as well as other developing nations through displacement of charcoal with clean cooking fuel, he said. The project isn’t yet approved by UN-overseen emission-credit regulators based in Bonn, he said.
The revenue from the Bank of America option premium allows CleanStar, the Maputo, Mozambique-based venture running the project, to raise additional debt and equity, Karmali said. “This is not just about CERs being the only finance source. It has the potential to displace a substantial portion of the charcoal market” in the sub-Saharan region, worth $10 billion a year, he said.
To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net
