• Home
• Construction
• News Article

World Bank ready to help Oman, GCC states identify CDM projects

MUSCAT -- The World Bank is willing to assist Oman and the other Gulf states identify clean-energy initiatives under the Kyoto Protocol's Clean Development Mechanism (CDM), according to a visiting expert from the international financial institution.

Gael Gregoire, the Washington DC based body's Carbon Finance Specialist for Sustainable Development Management in the Middle East and North Africa Region, said the institution is ready to support the Gulf region exploit potential opportunities offered by the lucrative global carbon market.

"We have looked at the potential for CDMs in seven Middle East and North African countries -- mostly in the mid-income segment.

But this has not happened yet in the GCC region. If the Gulf states are interesting in having The World Bank on board to help them identify and market CDM projects, we are very willing to offer the required assistance," Gregoire said.

The official is currently visiting the Sultanate as part of The World Bank's delegation to the 1st Middle East & North Africa Forum on Flaring Reduction and Gas Utilization, which concluded at Al Bustan Palace InterContinental Hotel. Gregoire delivered a presentation on The World Bank's Carbon Partnership Facility, during the morning session yesterday.

Speaking to the Observer, Gregoire underlined the need for countries to set up a Designated National Authority (DNA) whose approval is mandatory if clean-energy projects are to be registered as CDMs.
"The DNA can help support the creation of an environment to attract CDM projects, and also show that the country is willing to attract and implement CDMs.

Some countries have been really active in this regard, an example being Morocco, which after the Marrakech Climate Conference in 2001, set up a DNA that identified more than 70 CDM projects in the country at the time. But other countries in the region haven't gone that far. In my view, DNAs should play not only their mandated role under the Kyoto Protocol, but also increase the attractiveness of the country for CDM projects."

To help countries meet their emission targets, and to encourage the private sector and developing countries to contribute to emission reduction efforts, the Kyoto Protocol created three market-based mechanisms -- Emissions Trading, the Clean Development Mechanism (CDM) and Joint Implementation (JI).

The CDM, in particular, allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialised countries to a meet a part of their emission reduction targets under the Kyoto Protocol.

But for the projects to be considered for registration as CDM initiatives, they must first be approved by the country's Designated National Authority before being vetted by a rigorous registration and issuance process designed to ensure real, measurable and verifiable emission reductions.

The Sultanate of Oman, which ratified the Kyoto Protocol in 2005, is in the process of formalising the establishment of a DNA. An announcement to this effect is expected in the near future, it is learnt. The Designated National Authority falls within the mandate of the Directorate General of Climate Affairs at the Ministry of Environment and Climate Affairs.

Establishing the NDA will allow for investors and businesses in the Sultanate to benefit from incentives available for projects certified as meeting sustainable development criteria. The move will also stimulate Oman's entry into the multi-billion dollar global carbon market, experts say.

Asked about prospects for an active carbon market taking root in the Gulf region, Gregoire said this would depend on the potential for trade between carbons credit and demand. "The demand is mainly in countries that have ratified the Kyoto Protocol.

Although the market has greatly evolved, we saw an actual slowing down of the primary market last year.

Most of the private sector players (in this market) need long term certainty of what the carbon credit demand would look like after 2012 (when the Kyoto Protocol expires).

At the World Bank we are trying to offer a funding solution in the form of the Carbon Partnership Facility, which will guide mostly post 2012 emission reductions.

This fund will be compatible with whatever regime we will have in place after 2012.

Even though we do not know at this point what the new regime will be, we are eager to help the players find (markets) for buy their emission reductions, which may not be very easy at the present moment."

By Conrad Prabhu

© Oman Daily Observer 2010