Spanish Carbon Fund

About

The Spanish Carbon Fund (SCF) was created in 2005 in an agreement between the Ministry of Environment and Rural and Marine Affairs and the Ministry of Economy and Finance of Spain and the World Bank. This fund was established to purchase greenhouse gas emission reductions from projects developed under the Kyoto Protocol to mitigate climate change while promoting the use of cleaner technologies and sustainable development in developing countries and countries with economies in transition.

The SCF was a public/private partnership administered by the World Bank. In addition to the Spanish government, eleven private entities also participate in the fund. The SCF purchased emission reductions generated by the projects included in the portfolio eligible to be considered for registration under the Kyoto Protocol’s Clean Development Mechanism (CDM) and Joint Implementation (JI), as well as the Emissions Trading Scheme (ETS) of the European Union.

Scope of work

The SCF was designed to include projects from Africa, East Asia and Pacific, Eastern Europe, Latin America, North Africa and Middle East, and South Asia. The projects included renewable energy, energy efficiency, solid waste management, HFC-23 destruction, transportation, hydropower, and the oil and gas sector.

The Fund supported projects that are consistent with all international rules and procedures established under Article 6, and 12 of the Kyoto Protocol, namely Joint Implementation and the Clean Development Mechanism. The Fund has also purchased emission reductions backed by Assigned Amount Units under the International Emissions Trading mechanism (Art. 17) provided that such Assigned Amount Units are backed by real measurable emission reductions.

All projects receiving support from the Spanish Carbon Fund had to comply with the operational policies and procedures of the Bank, including the World Bank's Safeguard Policies, Country Assistance Strategies, applicable National Sustainable Development Programs and Poverty Reduction Strategy Papers. The Fund paid special attention to the development of projects in Latin America, North Africa and Europe and aimed at promoting renewable energy and energy efficiency projects in its portfolio.

Objectives

Spain decided to achieve its greenhouse gas emission reduction target through a combination of implementation of domestic reduction measures and use of the flexible mechanisms defined by the Kyoto Protocol. The Spanish Carbon Fund was one of the initiatives implemented by the Spanish Government to achieve this goal.

The main objectives of the Spanish Carbon Fund were:

To purchase greenhouse gas emission reductions to contribute to Spain’s emission reduction target at a competitive cost;
To promote renewable energy and energy efficiency projects in developing countries and countries with economies in transition;
To acquire knowledge and experience on carbon finance and to share that experience with the fund participants and stakeholders.

Through the projects included in its portfolio, the Spanish Carbon Fund contributed to improving the knowledge and the governance schemes of the projects’ host countries, complementing other development programs and projects managed and coordinated by the World Bank.

Participants

Spanish Carbon Fund (Tranche 1)
Public sector
Spanish	Government of Spain
Private sector
Spain	Gas Natural SDG, S.A.
Iberdrola Generacion, S.A.U.
Endesa Generación, S.A.
Zeroemissions Carbon Trust, S.A.
Hidroeléctrica del Cantábrico, S.A.
Compania Espanola de Petroleo, S.A.
Comercial de Materiales de Construccion, S.L.
Repsol YPF, S.A.
Azuliber 1, S.L.
Cementos Portland Valderrivas S.A.
Viesgo Generacion, S.L.