Thursday, May 29, 2008

Climate-Bond Plan by UN Official Aims to Boost Energy Investing

A step toward securitization of CDM projects! Then we bring on the swaps and options! Packaged products! Slice'n dice the tranches! What a great time to be alive!

The United Nations is considering a new type of bond that would spur investment in clean-energy projects in the developing world.

The so-called climate bonds would be sold to investors by developing countries in Africa, Asia and Latin America, Yvo de Boer, the UN's top climate-change official, said in an interview yesterday from Bonn. Each security would finance projects designed to reduce greenhouse gases blamed for global warming. Mature bonds could be exchanged for credits that allow industrial plants to emit a certain amount of carbon gases, he said.

The UN runs the world's second-biggest greenhouse-gas credit market, valued at 11.7 billion euros ($18.3 billion) last year. The proposal would simplify the funding of windfarm and solar projects because each bond would group together multiple clean- energy projects. The plan would encourage investment in nations struggling to meet their renewable-energy targets, de Boer said.

``This is a mechanism that allows market players to engage without having to get involved in the nitty-gritty of projects,'' said de Boer...MORE