Energy-Efficiency and Carbon Credits in Pakistan
The company identifies investment projects in Pakistan as to their eligibility for carbon credits under the Clean Development Mechanism (“CDM”). It intends to generate revenues principally through earning an entitlement to a share of carbon credits generated by eligible projects.
The company’s most visible project is a Compact Fluorescent Light (CFL) project which will involve the replacement of up to 60 million incandescent light bulbs in Pakistan and their replacement with energy saving light bulbs. The CFL project is designed to replace older and less efficient incandescent bulbs with CFL bulbs that use 75-80% less power and reduce greenhouse gas emissions by reducing the power demand on existing fossil burning power generation plants. With the installation of the planned 60 million CFLs 4.02 million tonnes of CO2 would be abated and this would also result in 4.02 millions CER (Certified Emission Reduction) tradable carbon credits being awarded each year for an initial 7 years. Carbon credits currently trade between approximately €8-9 each. The company has signed a non binding term sheet with a major international energy company which sets out the outline terms for the sale of all CERs issued to the company.
“The loan notes and redeemable shares have been structured to have the potential to achieve approximately a five fold return on the initial investment over approximately four years from the date of the investment.”
A letter of intent has been obtained from the Pakistani Government.