U.N. clean energy project to widen, aiding Africa

BONN, Germany (Reuters) - The poorest nations in Africa are likely to benefit from a widening of a U.N. project to promote non-polluting energies in the developing world, the head of the scheme said on Tuesday.

New rules from June should make it easier for some renewable energy schemes, that might previously have been regarded as uneconomic or hampered by red tape, to get off the ground.

"There is a huge potential if it's developed right," Hans Juergen Stehr, chair of the executive board of the U.N.'s Clean Development Mechanism (CDM) told Reuters during 166-nation talks in Bonn about ways to fight global warming.

"It will increase the possibilities and the potential for small-scale projects," he said, declining to estimate how much it would add to the multi-billion dollar CDM.

Some experts estimate the CDM, part of the U.N.'s Kyoto Protocol for slowing global warming, could channel $100 billion into developing nations. The reforms will be agreed at the board's next meeting in June, he said.

He added the rule changes would make the CDM more relevant to the poorest nations, such as in Africa, which has won fewer CDM investments than other parts of the developing world.

The CDM now comprises 655 projects ranging from hydroelectric dams in Honduras to wind farms in Morocco.

Under the new guidelines, a city in the developing world might shift to install energy saving light bulbs in one district, and then expand to ever more neighborhoods to help cut use of fossil fuels, Stehr said.

Until now, such a project would have been limited to the original district and could be too small to attract investment.

INDIAN VILLAGES

Or Stehr said a group of villages in India could attract funding for a shift to renewable energies such as solar power or biofuels.

The new rules would make it economic for a few villages to start off and then widen the project to scores of others. "If you add up and have 100 these very small, isolated activities become valid also as a CDM project," he said.

The CDM allows rich nations to invest in renewable energy projects in developing nations and then claim credits back home for the greenhouse gas emissions they avoid.

Those credits can be traded -- CDM projects in the pipeline have the potential to prevent emissions of 1.9 billion tonnes of greenhouse gases, Stehr said. "That's $19 billion if the credits are worth $10 per tonne," he said.

Stehr said the CDM was continuing to expand even though governments have not agreed how to extend Kyoto, whose first period runs to 2012. The Bonn talks are part of a long-term hunt for a new deal to replace and widen Kyoto.

"The number of projects in the pipeline has been increasing even over the past year," Stehr said, adding that it might soon peak because of uncertainties about what will happen to Kyoto.