The Standard Bank Group, parent company of Stanbic Bank Ghana has finalised an agreement to support The African Stove Company (TASC) with funding for what is believed to be the first carbon credit project of its type in South Africa designed to combat climate change and simultaneously drive positive social outcomes in rural areas.
The facility provides TASC, with funding to support its socially orientated projects. The company’s revenue stream is derived from selling carbon credits issued in respect of emission reductions that will result from rural communities using about 680 000 cookstoves donated by the company to South African communities, says Lawrence Cole-Morgan, Lead Carbon Credit Trading at Standard Bank.
“The efficient stoves significantly reduce the wood required to fuel the stoves. This has immediate benefits for the emission of greenhouse gases, particularly carbon dioxide, combats climate change and helps preserve biodiversity.”
“The tangible advantages for the communities involved are reduced costs and less time spent sourcing cooking fuel from surrounding environments. Because the stoves burn much cleaner than traditional cooking methods, they also offer health benefits and avoid the dangers of cooking on open fires to users and the community” says Cole-Morgan.
TASC generates carbon credits as a result of the reduction in carbon emissions from the use of the cookstoves and the distribution of cookstoves is funded by the sale of carbon credits to companies that want to contribute to combatting climate change and offset their emissions.
However, these sales can occur months or even years after a project is established and the development of carbon credit projects requires upfront capital to execute the project.
Standard Bank is providing TASC finance against the future sale price of the carbon credits and thereby assisting TASC’s goal in reaching its goal to distribute 750,000 efficient cookstoves to rural communities.
“Through this deal, Standard Bank has demonstrated that it can fund against carbon credits as a commodity. The TASC project differentiates Standard Bank’s Corporate and Investment Bank (CIB) by displaying its key competencies and highlighting its ability to provide complex, sustainable green and social loans on the African continent” says George Kotsovos, Executive: Energy & Infrastructure Finance at Standard Bank.
“Further enabling our capabilities is the African footprint of the Standard Bank Group and our reputation for providing our clients with bespoke solutions for their specific needs,” says Kotsovos. “Our African presence is a competitive advantage as we provide clients access to various markets and back this strength with locally based expertise to offer market insights.”
Shelley Estcourt, TASC CEO Africa, says, “Carbon credits enable companies to offset their carbon emissions and contribute to a more sustainable future.”
“We are delighted to have Standard Bank as a partner in fighting climate change and improving the lives of rural communities. We look forward to a long, mutually rewarding association in the future.”