World Bank signs agreement with Roxas unit for carbon fund

MANILA, Philippines - Washington-based lender World Bank and the bioethanol unit of listed Roxas Holdings Inc. signed an Emission Reductions Purchase Agreement (ERPA), which the firm said is seen to boost its earnings in the next four years. The ERPA for Roxas Holdings’ ethanol plant wastewater and methane gas recovery project seeks to reduce air and water pollution, mitigate the impact of climate change and help address poverty in Negros Occidental. The World Bank signed as a trustee of the Community Development Carbon Fund (CDCF). The ERPA has a crediting period of 10 years starting 2010. In a statement, Bert Hofman, World Bank country director for the Philippines, said it was the sixth agreement signed by the World Bank in the Philippines since the bank started supporting carbon finance operation in the country in 2003. Under the agreement, the World Bank, through CDCF, will purchase the carbon credits coming from the operation of Roxol Bioenergy’s wastewater treatment facility and the methane gas recovery system of its ethanol plant in La Carlota, Negros Occidental. “The ERPA will give Roxol’s income stream a boost of at least $3.2 million in the next four years," Pedro Roxas, chairman of the board of Roxol said. Roxol is expected to start its operation by December 2009 followed by its commercial run by January 2010. Roxas said the project will prevent the emission of at least 50,000 metric tons of carbon dioxide each year. Part of the revenue for the purchase of the emission reductions by the CDCF—a dollar per metric ton of carbon dioxide reduced—would be used to finance Roxol’s community development projects including livelihood (such as animal dispersal, agricultural production and trading); health services; and educational services including scholarships, vocational training for out-of-school youth, rehabilitation of schools and day care centers. “About 3,500 residents in Barangay Roberto S. Benedicto in La Carlota City and Barangay Don Salvador Benedicto in Pontevedra, Negros, many of whom are beneficiaries of the government’s agrarian reform program, will benefit from this project," he added. Besides providing local employment, the project, Roxas said, will increase demand for materials and equipment and other inputs and services, such as labor and transportation to support the ethanol plant’s operation. “This project will create jobs for farmers, suppliers, drivers and laborers," he said. Roxol Bioenergy, which will use molasses sourced from its sugar mills as raw material in its ethanol production, will have a production capacity of 100,000 liters a year. Last year, the company engaged the Indian firm KBK Chem-Engineering Pte. Ltd. to build and activate its ethanol plant on a turnkey basis. The CDCF’s ERPA with Roxol Bioenergy forms part of the growing number of Clean Development Mechanism projects in the country, which now total 19, ranking the Philippines seventh globally in terms of the number of registered projects. - GMANews.TV