Natsource LLC, the greenhouse gas (GHG) asset manager, revealed this week that two of its entities are to participate in a billion dollar GHG transaction.
The two Natsource entities, Canadenis Acquisition Limited and Tamarisk Acquisition Corporation, will make a combined purchase of approximately 23 million Certified Emissions Reductions (CERs) expected to be delivered from the World Bank's Umbrella Carbon Facility (UCF).
'This is a path-breaking transaction,' said Jack Cogen, President of Natsource LLC. 'Deals that mobilize this scale of capital illustrate that markets are the most effective mechanism for companies to meet their reduction requirements cost-effectively and address the problem of global warming. Natsource will continue to use its investors' capital to participate in similar transactions. We congratulate the World Bank for originating this deal,' said Cogen.
Each Natsource entity purchased the maximum amount of CERs expected to be sold from the UCF. The purchases represent 24.5% of the CERs made available to the private sector. The remaining CERs are expected to be purchased by the World Bank's existing carbon funds.
Clean Development Mechanism (CDM) projects authorized by Article 12 of the Kyoto Protocol create CERs. These projects reduce greenhouse gas emissions and create sustainable development benefits for the countries hosting them. Buyers of CERs can use them to comply with requirements to reduce their greenhouse gas emissions.
The World Bank announced the creation of the UCF in December of 2005. The UCF will aggregate multiple sources of funding to purchase large volumes of emission reductions from projects on behalf of its own carbon funds, private firms and governments. In this transaction, the CERs are being created by two chemical facilities that will capture and decompose HFC23 -- a byproduct from the production of HCFC22, which is used as a refrigerant and a building block for other chemicals.
Natsource is an integrated company providing asset management services, transaction services and advisory and research services in local, national and global emissions and renewable energy markets. Natsource Asset Management (NAM), an arm of Natsource LLC, is the largest private sector greenhouse gas (GHG) asset manager in the world. It manages the Greenhouse Gas Credit Aggregation Pool (GG-CAP) and a series of private accounts. GG-CAP has EUR 510 million (approximately USD 640 million) in capital committed by 26 participants. The capital will be used to purchase and manage delivery of a large pool of CERs created by CDM projects and Emission Reduction Units (ERUs) created by Joint Implementation (JI) projects that participants can use to comply with GHG emissions targets from 2005-2012.
NAM also advises a series of managed accounts and operates the Natsource Aeolus onshore and offshore funds which take advantage of investment opportunities in emissions and renewable energy markets around the world. The managed accounts and the Aeolus funds stimulate the development of GHG emission reduction and renewable energy projects and provide a necessary source of financing to developers