US-based NGO The Climate Trust has launched a $5-15 million fund to finance projects that can generate offsets for the California cap-and-trade scheme and voluntary carbon markets.
The Climate Trust said it has secured grant funding from the US Department of Agriculture and the Lucille Packard Foundation, adding that it hopes the fund can eventually be scaled up when other investors get involved.
“We are currently deploying funding in our preferred sectors—forestry, grassland conservation, and livestock digesters—and plan to incorporate additional sectors as our investment fund scales. Our active involvement with project owners ensures healthy yields of credits, and fruitful revenues from credit sales,” the organisation said on its website.
“We are looking to deploy $5.5 million to projects in 2016, and then an additional $10 million over 2017 and 2018,” it added.
The Climate Trust will launch a request for proposals process on Jan. 25.
The fund will provide upfront investment of half the current market price for offsets, and profits will be shared between The Climate Trust and project owners.
The NGO said it will manage the sale of the offset credits, and is also structuring $22.7 million in existing funds in a way that allows it to be a buyer of last resort, to guarantee the offsets have a minimum value.
The Climate Trust is a long-standing participant in US carbon markets, and to date it has committed to purchase over $31.6 million in carbon financing for greenhouse gas emission reduction projects.
By Stian Reklev – stian@carbon-pulse.com
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