GVEP International, in partnership with the Ashden Awards for Sustainable Energy, has published a guide for energy entrepreneurs who want to link their businesses to carbon finance. The guide, which is part of a series also covering Investment Finance and End-User Finance, aims to provide recommendations on their first steps to assess their businesses’ potential and guide them through the complexities of the ever-evolving carbon market.
Topics covered include the key concepts of carbon finance, the application process, balancing the up-front costs of accessing Carbon Finance and future revenue from Carbon Credit sales, investment planning, engagement with investors and potential partners and the common pitfalls faced by entrepreneurs entering the carbon market. Finally, the guide provides a list of online carbon finance resources.
Access to finance for small-scale energy projects in developing countries is one of the major constraints to their expansion. In recent years, the availability of carbon finance through emissions trading or ‘Carbon Credits’, has been creating opportunities for entrepreneurs in the process of developing sustainable energy projects.
However, it is mainly larger enterprises have been able to profit so far. Often expectations are high but not all are aware of the steps required to access carbon finance. This guide acts as a starting point for anyone hoping to enter the market by laying out the various carbon finance options and describes the procedures for accessing them.
Accessing carbon financing mechanisms is rarely, if ever, a straightforward process – hence the need for a concise, practical guide, including examples, calculations and cases studies. The guide is intended for project managers who want to know how to estimate the carbon emissions saved by their project and for entrepreneurs, who want to be able to consider carbon finance in their investment plan.
The guide answers questions such as:
- What information do I need to gather to assess the potential of carbon finance?
- What level of investment is needed up front?
- How do I determine the possible revenue from carbon finance?
- What are the challenges in getting carbon credits?
- What will investors look for in assessing the feasibility of my project?
- How do I approach potential carbon credit buyers?