NEFCO is involved in a number of initiatives focusing on climate, and it was an early participant in the project-based segment of the carbon markets. In this capacity, NEFCO has mobilised significant new investments for climate change mitigation, including from private investors through its carbon funds.

NEFCO is also cooperating with other institutions and states active within the climate space. This includes extensive cooperation with regional Nordic and bilateral (owner country) initiatives such as the Nordic Partnership Initiative (NPI).

In general, NEFCO maintains working relationships with a number of international institutions such as the World Bank, bilateral institutions like the German Development Agency Kreditanstalt für Wiederaufbau (KfW) and the Japan International Cooperation Agency (JICA), and various UN organisations working with climate change activities, notably United Nations Environment Programme (UNEP) and United Nations Framework on Climate Change (UNFCCC). NEFCO is an observer to the Green Climate Fund and a Lead Partner in the Finance Initiative under the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants (CCAC).

Gas-to-Energy in Bogotá (NorCaP)

The Doña Juana landfill, located in the District Capital of Bogotá is the principal site for the disposal of the municipal solid waste generated by the 7 million inhabitants of Bogotá, handling an average of 2 million tonnes of household waste per year. The Doña Juana Landfill is the largest sanitary landfill in Colombia and one of the largest in Latin America. The project was registered as a CDM project in 2009 and commissioned in the same year. It has been contracted as one of the first projects under the NEFCO Norwegian Carbon Procurement Facility (NorCaP).

The project’s objective is to maximize the capture of landfill gas (LFG) in currently operational and future land filling zones within the perimeter of the Doña Juana landfill site; and to combust it in order to reduce fugitive emissions of methane. The gas generated by anaerobic waste degradation within the mass of the landfill is a potent greenhouse gas which contributes to global warming and climate change. Before the commissioning of the LFG project, the landfill gas from these areas was vented to the atmosphere through passive gas wells.

The state-of-the-art CDM project has invested around EUR 10 million to date, which includes the following technology and equipment:

  • A gas collection pipe network and vertical gas wells

  • A pumping system and high temperature enclosed flares

  • A gas analyzer room

  • A supervisory control and data acquisition system

  • A treatment and compression plant

  • A reciprocating gas engine for electricity generation

The project developer Biogás Doña Juana S.A. expects to reduce GHG emissions in the order of 820,000 tonnes p.a. NorCaP supports the project since its project’s emission reductions have been deemed vulnerable to discontinuation owing to the current near zero carbon price which has resulted in the developer being under severe financial stress in recent years and consequently an imminent risk of the CDM project of being discontinued. With NorCaP’s long term CER purchase secured, Biogás Doña Juana S.A. now seeks to invest further in renewable electricity production at the site, further improving the sustainability of the project.

Hydro-power project in Vietnam (NeCF)

The Nam Khanh 12 MW run-of-river hydro-power project, located in Ban Lien Commune, Lao Cai Province in Vietnam, is a typical NEFCO Carbon Fund (NeCF) project. The project activity involves the construction of a small reservoir, 2 km tunnel, pressurised well, penstock, power house with 3 units (each unit has a turbine and a power generator) and discharge channels. The net electricity generated from the project is sup-plied to the national grid via a newly constructed 110kV transmission line that connects the Nam Trai hydropower plant and an existing transformer station.

NeCF contracted the project in June 2010 to purchase 90% of the estimated total of 188,000 certified emission reductions (CERs) to be generated between 2012 and 2019. The latest monitoring report of the project shows that the project has generated around 50,000 CERs during the period 2012 to 2014 by selling approximately 30,000 MWh of clean electricity to the grid. Compared with the annual estimate of savings as per the project design document, the delivery rate is approx. 70%.

Prior to the implementation of the project activity, no power generation existed at the project location. Electricity supplied in Vietnam is generated mainly from fossil fuel sources and is distributed to consumers solely via the national electricity grid. By displacing fossil fuel-based power generation with renewable hydropower production, the project reduces greenhouse gas emissions. These savings are purchased and used to offset emissions in the developed countries.

Additional project benefits
In recent years, Vietnam has suffered electricity shortages as a consequence of rapidly increasing demand and insufficient supply, with negative impacts on economic growth as well as the daily lives of people. This clean energy project will contribute towards meeting the demand gap.

In addition, the project contributes positively to the economic wellbeing of Lao Cai Province – a poor mountainous area in northwest Vietnam – by facilitating its industrialisation process and supporting economic development. The infrastructure of the Ban Lien Commune, where minority ethnic groups also live, will be improved by new roads, better electricity service, new communication links and clean water treatment systems.

Production of biomass briquettes in Kenya (NCF)

The project is located in Homa Bay in Western Kenya, just a few hours drive along the Lake Victoria shoreline from Kisumu to Homa Bay.

The project, which deals with commercial production of biomass briquettes in Kenya, was selected for funding through the Nordic Climate Facility's fourth call for proposals. At the time of the visit, the project implementation was starting under the auspices of local partners Kenya Forestry Research Institute (KEFRI) and the Gum and Resins Association (GARA) that have teamed up with the Nordic Partner Norges Vel to implement the project.

Sugar cane farming provides on-farm employment for some 2 million farmers in the area. Yet, the region is among the poorest in Kenya with an unemployment rate as high as 80%.

Despite providing a livelihood for people in Homa Bay, sugar cane contract farming is accelerating deforestation, as tree cover needs to give way to constantly expanding sugar cane fields. Trees also face pressure from households, which depend almost exclusively on traditional fuelwood and charcoal for cooking and heating. At the same time, a valuable energy source, the residue sugar cane bagasse, is largely left unutilized at the mills as only about 60% of the bagasse is used to generate processing heat at the mills.

The project is trying to tackle these challenges by introducing the use of sugar cane bagasse as an alternative renewable energy source. The concept of using agricultural residues as fuel is new in Homa Bay, and to promote it, the project will support the establishment of five bio-enterprises producing both uncarbonized and carbonized briquettes made of sugar cane bagasse as well as cook stoves needed to use the briquettes. The project is expected to stimulate the creation of green jobs and improve rural livelihoods with environmental benefits, including the reduction of CO2 and methane emissions.

The project will use a holistic, market-based approach to encourage energy consumers to switch from charcoal and firewood to biomass briquettes. Bagasse remains an underutilized source and on-going efforts have not succeeded in addressing energy poverty and employment among the rural population in an integrated manner. This project is the first attempt to engage private, large-scale sugar companies in supplying bagasse to small enterprises to stimulate green growth initiatives in the rural set-up by creating several new green businesses and jobs in the biomass briquettes value chain.