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UN approves $3mn for CDM loan scheme

13 Sep 2012 12:49 (+01:00 GMT)
UN approves $3mn for CDM loan scheme

London, 13 September (Argus) — A UN loan scheme designed to increase the number of clean development mechanism (CDM) projects in developing countries has authorised more than $3mn towards 23 CDM projects.

The loan scheme is run jointly by the UN Framework Convention on Climate Change (UNFCCC), the UN Office for Project Services (Unops), and the UNEP Risoe Centre. It provides interest-free loans for CDM projects in least developed countries (LDCs), as well as countries with fewer than 10 registered CDM projects.

“We are pleased to see the momentum the CDM loan scheme is creating,” Unops director Jan Mattsson said. “Often, these are small-scale and innovative project ideas that benefit traditional communities.”

The selected projects range from household-level energy efficiency, including energy-efficient cook stoves, to methane avoidance and transportation.

The majority of the selected projects — 17 of the 23 — come from Africa, which is very beneficial, UNEP Risoe director John Christensen said. “This indicates that the offset project infrastructure is transforming market access.”

The other projects are located in Asia-Pacific, the Middle East and Latin America. The majority of the approved loans are for programmes of activities (PoAs). PoAs group multiple, smaller projects together to reduce greenhouse gas emissions under the umbrella of one CDM project. The UNFCCC has repeatedly emphasised that the PoA is seen as an important means to extend the reach of the CDM, particularly in under-represented regions.

The loans will cover the development of project design documents, validation by designated operational entities and the initial verification of emissions.

Applications are currently being accepted for the second round of the CDM loan scheme and the deadline is 30 September.

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