In March 2016, some colleagues and I visited several villages around Kaffrine in Senegal where private companies had been awarded licenses to provide electricity on a commercial basis. As we spoke to people, two things became very clear. The initial cost of connection to the grid was too high for many poor people, and the cost of electricity offered by the private companies (or “concessionaires”) were in several cases higher than what the government-owned utility offered in nearby areas.
During this week in Durban, we announced two new financial initiatives designed to help the least-developed countries access financing for low-carbon investments and enable them to tap into carbon markets after 2012 - the Carbon Initiative for Development (Ci-Dev) and the third tranche of the BioCarbon Fund (BioCF T3).
The funds, focused on agriculture and access to energy, are designed to strengthen links to private sources of capital via carbon markets for some of the world's poorest communities.
The new instruments will help client countries to buy carbon credits from a range of projects including household biogas systems in Nepal, cook stoves in Africa, reforestation in the Democratic Republic of Congo, soil carbon in Kenya, and municipal solid waste in Uganda.
Ci-Dev, aiming to raise USD 120 million, is a partnership of donor and recipient countries, where public and private sector are pledging their support to capacity building and carbon market development in the poorest countries of the world.
The second initiative, the BioCF T3, will focus on reforestation and agriculture projects.
The agriculture projects are another example of the climate-smart agriculture we have been talking about all week – and deliver a triple win of increased food security and resilience through reduced soil erosion and increased land fertility as well as the access to new carbon markets.