EDF Trading buys Chinese green project developer

LONDON (Reuters) - EDF Trading, an arm of France's EDF Energy (EDF.PA), has bought Chinese clean energy project developer Energy Systems International Ltd. (ESIL), the company said in an undated statement on its website.

The terms of the deal were not announced.

ESIL develops projects that generate energy from hydro dams, wind farms and methane from coal mines under the Kyoto Protocol's Clean Development Mechanism (CDM), which awards carbon offsets to companies that fund greenhouse gas cuts in emerging economies.

"This is a significant transaction for EDF Trading as it will enable us to expand our presence in the carbon market as well as provide a strong platform for further development in China," said John Rittenhouse, chief executive of EDF Trading.

EDF is one of the top buyers of CDM offsets, called Certified Emissions Reductions (CERs).

The acquisition means EDF will see a steady stream of offsets from ESIL's 56 projects in China, which it can surrender against its emissions targets under the European Union's Emissions Trading Scheme (EU ETS).

UN data shows 32 of ESIL's projects have been registered under the CDM, with 17 having received 1.35 million CERs as of the end of June.

ESIL's project portfolio is expected to get 37.5 million CERs for emissions cuts made to the end of 2012, assuming all the projects get approved by the UN.

CERs for immediate delivery currently trade at 11.60 euros ($14.97) per metric ton, though analysts expect prices to climb to over 18 euros a metric ton by 2012.

EDF Trading said ESIL will remain a separate legal entity, which will form part of its Environmental Products business and will be managed out of the company's Singapore office.

This is the latest in a series of acquisitions seeing banks and other EU ETS participants acquire CDM project developers. Barclays Plc (BARC.L) in June bought Sweden-based developers Tricorona, while JP Morgan (JPM.N) last year bought UK-based EcoSecurities.

(Reporting by Michael Szabo)