Carbon Initiative for Development (Ci-Dev)
"The World Bank is proposing a new initiative, the Carbon Initiative for Development (Ci-Dev), which aims at helping low-income countries create sustainable access to financing for low-carbon investments through carbon markets. This initiative has three components:
- A Readiness Fund will support carbon capacity building, knowledge development and advocacy work for improving carbon market mechanisms, asset creation, and developing innovative approaches to leveraging carbon finance. This fund will be supported by donors.
- A Financing Fund will support early stage project financing by allowing the use of innovative carbon finance mechanisms. Front-loading of carbon revenues will be among the key objectives. Relying initially on donor resources given the high risks involved, this facility has the potential to be self-sustaining. This fund is planned to be launched in late 2012.
- A Carbon Fund is intended to support carbon finance transactions in low-income countries. Buyers will provide resources for carbon asset creation in exchange for a right of first refusal to sign an Emissions Reduction Purchase Agreement (ERPA) forward contract once the project reaches validation. The Carbon Fund will initially target certified emission reductions through the Clean Development Mechanism (CDM) in LDCs. It will broaden its geographical reach over time, as new market mechanisms appear and become eligible for compliance markets. Sellers will benefit from a long-term purchase agreements and a flexible pricing formula which gives them access to possible market upside. Buyers will benefit from a wide flexibility in selecting the projects from which they wish to buy and certainty on the cost of asset creation."