Allianz SE has closed a new carbon investment by co-financing a set of energy efficient lighting projects in India. The capital injection by Allianz will help to finance the replacement of approximately 8.5 million conventional light bulbs by energy efficient compact fluorescent light (CLF) bulbs amongst low and middle income households in India. In this way, the projects will reduce residential energy consumption and avoid the emission of 3.73 million tons of carbon dioxide (CO2) over a time span of 10 years. This amount is equal to the annual carbon emissions produced by 1 million cars in Germany. Implemented by C-Quest Capital LLC (CQC), one of the world’s top carbon investors and project developers, the Indian projects are accredited under the Clean Development Mechanism (CDM) defined under the Kyoto Protocol. For each ton of avoided CO2 emission, the projects are awarded an emission reduction certificate of the CDM. While most of the certificates will be sold on international carbon markets to generate financial returns, Allianz will purchase and withdraw parts of them in order to neutralize the company’s internal emissions as a part of its voluntary carbon reduction and neutralization strategy.
Given its fast population growth and surging economy, India is experiencing a significant increase in energy demand. Electricity costs are comparably high and currently more than half of the electricity is generated in coal power stations, emitting high amounts of CO2 to the atmosphere. “It is crucial to make emission reduction efforts along the entire electricity value chain and at a global level. By addressing carbon emissions at the household level in one of the fastest growing economies of the world, CQC’s energy efficient lighting projects are an innovative approach to help mitigating climate change,” says Armin Sandhövel, CEO of Allianz Climate Solutions, the centre of competence for climate change and dedicated carbon investment management entity of the Allianz Group.“Our Indian lighting efficiency projects make an important contribution to reducing overall electricity consumption, reducing greenhouse gas emissions from coal power production and resulting in large cost savings by poorer household electricity consumers. We highly appreciate Allianz’ investment and its voluntary commitment to reduce greenhouse gas emissions,” commented Ken Newcombe, CEO of CQC, on the Allianz investment.
The investment into the CQC lighting projects also helps Allianz to fulfil its own carbon reduction and neutralization ambitions. The Allianz Group has committed itself on a voluntary basis to reduce the company’s internal emissions by 20% between 2006 and 2012, which already in 2010 was overachieved by 7%. From 2012 onwards, the remaining emissions, which could not be avoided yet, will be neutralized through credits received from a portfolio ofinvestments into various carbon projects, such as those developed by CQC. Only recently, in September 2011, Allianz closed an equity investment into Wildlife Works Carbon (WWC), one of the leading project developers in the field of forest conservation, and secured the rights to purchase emission certificates from the world’s first certified REDD (Reducing Emissions from Deforestation and Forest Degradation) project developed by WWC.