German insurer Allianz SE and U.S.-based C-Quest Capital LCC said on Tuesday they will finance the installation of about 8.5 million energy-efficient lightbulbs in India in return for U.N.-backed carbon offsets.
The 10-year project will fund the installation of compact fluorescent lightbulbs in Punjab, Andhra Pradesh and northern Delhi, Armin Sandhoevel, chief executive of Allianz Climate Solutions, told Reuters in Singapore.
He said the project would cut about 3.7 million tonnes of carbon emissions over the decade, about the equivalent of the annual pollution from one million cars, and earn 3.2 million internationally tradeable U.N. offsets called certified emission reductions, or CERs.
CERs were trading at 3.88 euros ($5.1) on the secondary market on Tuesday, a drop of about 70 percent from levels in mid-2011.
Sandhoevel, speaking on the sidelines of a climate and insurance conference, said Allianz could live with a market level of $4 for CERs.
The project is part of an expanded form of U.N.-offset projects that reward clean-energy investments in poorer countries.
Called programme of activities, or PoA, it allows a large number of identical projects across a region or country to be bundled together.
This cuts project administration costs and can result in a large number of emissions reductions and therefore offsets.
The Allianz-CQC project is only the second PoA registered in India and one of 14 registered globally.
None have yet to receive their CERs but Sandhoevel was confident issuance would occur in a matter of weeks.
He said Allianz had about 20 low-carbon projects in the pipeline focusing on energy efficiency, renewable energy and forest carbon in developing nations to earn either CERs or Gold Standard voluntary market offsets.
The company is already committed to forest preservation projects in Kenya and Indonesia as part of Allianz's goal of reducing its own global emissions and expand its carbon-cutting investments.
By David Fogarty - firstname.lastname@example.org