After Al Gore’s warning on “planetary emergency” and distressed penguins in “Happy Feet”, there has been a growing groundswell among financial institutions
KOLKATA: After Al Gore’s warning on impending “planetary emergency” and distressed penguins in “Happy Feet”, there has been a growing groundswell among financial institutions to take action on handling climatic changes globally.
Rabobank International, which is investing 15 billion euros globally towards green loans, ethical investments and clean technology funds, is lining up a host of “green” products for the Indian market. The bank is looking at projects with leading Indian companies in the food, agri-business and renewable energy space.
This does not come as a surprise as estimates suggest that almost 70% of the world’s supply of carbon credits from clean development mechanism (CDM) projects is expected from three countries — Brazil, China and India. Approximately 11.5 million carbon credits will be generated per year and it is estimated that India is on track to receive approximately $46-172 million per annum (Rs 200-800 crore) from these projects.
“We have come up with specific investment funds to finance projects across the world. Last year, Rabobank contracted to buy 1.6 certified emission reductions from a leading poultry client in Chile. In 2007, the Commodities and Weather Derivatives Group of the bank has started trading in verified emission reductions,” Bart Jan Krouwel, managing director, corporate social responsibility, Rabobank International, said.
“In India opportunities are huge and both Rabobank and Rabo India Finance are pursuing a selective approach. We will endeavour to do a few carbon credit deals per year in our core competency sectors like food and agri-business and renewable energy”, Krouwel said.
Rabo India Finance, the 100% subsidiary of Rabobank International which launched its credit products suite a few months back, is in discussions with a few companies to buy carbon credits. Its new offering, called credit wraps, introduced in India and other developing countries to select carbon credits projects apparently removes the risks perceived by many overseas buyers.
According to an official of Rabo India Finance, this product is likely to enhance the level of interest that foreign buyers show in India projects. “Another interesting trend is that the finance and technical functions of many Indian companies are developing greater knowledge of the area and we expect that this could lead to various instruments like hedging products”, he said.
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