LONDON (Reuters) - Credit Suisse will offer a structured carbon emissions deal next month worth about $200 million, the Swiss bank’s head of carbon trading told a conference on Wednesday.
The transaction involves 11.5 million tonnes of U.N.-approved carbon dioxide offsets, called certified emission reductions (CERs), generated from 25 emissions-cutting projects in China, India and Brazil.
“As far as I know, this is the largest structured carbon transaction ever done from a volume perspective,” Paul Ezekiel told the conference, which was hosted by International Financing Review, a subsidiary of Thomson Reuters.
Bidding on the deal will begin November 6, Ezekiel added.
Under the Kyoto Protocol’s Clean Development Mechanism, companies from rich nations can invest in emissions-cutting projects in developing countries, and in return receive CERs which can be used toward their own emissions reduction goals or sold for profit.
According to market analysts IDEAcarbon, CERs sell directly from clean energy projects for 10-12 euros a tonne. CERs trade at about 17 euros ($21.85) per tonne in secondary markets with guaranteed delivery.
Ezekiel said the projects, which are in various stages of a U.N. registration process, were sourced from five different CDM project developers in order to diversify risk.
“We’ve had a lot of interest in this, it’s a very high quality portfolio of projects,” Ezekiel added.
The transacted CERs will be delivered annually starting in December 2009 and ending in March 2013.
The deal will be split into three non-guaranteed tranches, Ezekiel said, adding Credit Suisse would retain a 25 percent stake divided equally amongst the tranches.
Credit Suisse completed a similar deal for 5.5 million CERs in December 2007.
Editing by Gerard Wynn