18 June 2015
The first carbon credits transaction involving a seller and a buyer from West Africa has been announced by Ecosur Afrique, a leading carbon finance group in Africa.
“The exchange of carbon credits involves traditionally their transfer from developing countries to industrialised countries,” says Fabrice Le Sache, the chief executive of Ecosur Afrique. “We are convinced that the future of the market lies in part in the development of South / South transactions, particularly within Africa.”
In the transaction, his company is partnered by Investisseurs & Partenaires, an impact investment fund dedicated to small and medium size enterprises in sub- Saharan Africa, and Volta Rental Services (VRS), a car leasing company operating in West Africa. It was announced on 15 June.
Ecosur Afrique structured the transaction, which allows VRS customers to offset the CO2 emissions of vehicles leased in Ghana, Ivory Coast and Senegal.
Thomas Crand, the co-founder of VRS, says: “We develop a strong environmental strategy; CO2 emissions are at the heart of our concerns and we are pleased to offer our customers the option to offset their carbon footprint. Today’s transaction is pioneering and a unique choice, which distinguishes us on the West African market. We hope it will become standard in our sector.”
VRS will aggregate the offset demand of customers taking part in the carbon neutral programme each quarter and for the whole fleet concerned. The carbon credit purchases will also be made quarterly.
The carbon credits, or emission reductions, which are at base of the offset transaction, are generated from the dissemination of energy efficient cooking stoves in Ivory Coast. The stoves are distributed as part of the Soutra Fourneau programme financed and operated by Ecosur Afrique.
They use less charcoal, so helping small entrepreneurial users such as restaurants or canteens. The use of charcoal and firewood for cooking purposes is a major source of CO2 emissions and deforestation in West Africa. Beyond the environmental aspect of the stoves, the benefits are numerous: redistribution of purchasing power to consumers, decrease of noxious fumes, cutting meal preparation time by half.
“We have been working for several years on our carbon credit offer in order to create sufficient liquidity allowing the emergence of such a market,” says Le Sache. “With over 40 projects in 17 countries, we now have the largest portfolio of African carbon credits in terms of volume and diversity. We must now increase and expand the demand. Similar CO2 offset transactions are under negotiation with African hotel chains, carriers and agribusinesses.”
As a private investor of VRS, Investisseurs & Partenaires played a major role in the operation. The fund began by offsetting its own CO2 emissions and proposed this solution to some companies in its portfolio, particularly to those in the logistics, transport, and distribution of fresh products sectors.
Jean-Michel Severino, the fund’s chief executive, says: “It shows, once again, its commitment to pioneering entrepreneurial ideas, both to strengthen the business model of its holdings, to offer them distinctive solutions in their market and to assist them in environmental and social performance, a pre-condition of economic sustainability.”