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VEDA Climate Change Solutions Ltd

LULUCF Project:

Realising the importance of addressing issues related to climate change, as a part of its activities, VEDA MACS Ltd has conceptualized a project to ensure both local and global benefits through Clean Development Mechanism (CDM) of UNFCCC and submitted a Project Idea Note (PIN) “Improving  Rural Livelihoods Through Carbon Sequestration by adopting environment friendly technology based agro-forestry practices” in 2003 to the BioCarbon Fund established by the World Bank.

The project proposes to mobilize and encourage small and marginal farmers to raise plantations of tree species with high rates of carbon sequestration in their farmlands. It will focus on women but not be limited to women.  It proposes to link, facilitate and  coordinate with international organizations, carbon financing companies,  financial institutions, Government and non governmental organizations, plantation material suppliers, agronomists,  micro-irrigation experts,  end users of the wood products (paper and construction industry etc.) to  optimize the overall returns to the small and marginal farmers besides supervising and monitoring to ensure the compliance of commitments made to the principal institutions like Banks, Carbon Fund implementers and participant institutions. The project is expected to sequester 260,550 t CO2e by 2012 and in the range of 276,000-646,200 t CO2e.

Activities under the BioCF Project:

• Identify small and marginal farmers scientifically.
• Provide advice and training in Agronomy, Soil Conservation,  best plantation practices and use of environmental friendly technologies  by outsourcing experts.
• Arrange seedlings produced from clonal technology to the farmers to raise high density plantations.
• Promote farmer-industry partnerships with buy back arrangements to purchase wood.
• Encourage farmers to go for agro-forestry practices such as inter-cropping during the first year to meet their subsistence costs.
• Generate additional income from carbon credit to the farmers.
• Develop and strengthen the capacity of small and marginal farmers, govt. and NGOs   to enhance their negotiation skills to take advantage of the international mechanisms.
• Conservation of biodiversity through reduced dependence on natural forests
• Production of raw material to the paper industry locally thereby reducing the cost of transportation and consumption of fossil resulting in reduced emissions.
• Saving of valuable foreign exchange by producing wood for paper and construction industry and thereby reducing the dependence on timber imports.
• Development of suitable agro forestry models through research in collaboration with ICRAF and other international and national research organizations and the results of such research would be fed into this project for adoption of agro forestry models by the farmers to increase their returns.

After detailed review of the PIN, the BioCarbon Fund found the PIN of high quality and well substantiated and asked VEDA MACS to submit a Carbon Finance Document (CFD).  In response to that, VEDA MACS Ltd has submitted the CFD to the BioCarbon Fund in July, 2005 which was placed before the Fund Management Committee (FMC) of the BioCF in August, 2005. FMC cleared the CFD and subsequently it was placed before the Participants Committee of the BioCarbon Fund on 8-9-05 which has finally approved the project for further development. The project has also received “No Objection” from the Designated National Authority (DNA), Ministry of Environment and Forests, Government of India for further development of the project.

As part of the World Bank due diligence,   a team from the World Bank, Washington, DC from the  Carbon Finance Business Division of the World Bank along with officials from  the World Bank, New Delhi visited  the project sites from 27-10-05 to 31-10-05. LoI was   signed and  subsequently the Emission Reduction Purchase Agreement (ERPA) was also signed on 9th  May, 2007 with the World Bank.    The Environmental safeguards review has been  conducted in March, 2006. The project was presented to DNA in the  Ministry of Environment and Forests, Government of India  for Host Country Approval on 8^th Feb, 2006 and the Host Country Approval has already been accorded. Validation of the project by the World Bank assigned Designated Operational Entity (DOE) is scheduled in April, 2009. 

It is one of the 22 projects selected by the BioCF for purchase of tCERs from around the world and the only one from South and  West Asia . The project will serve as a pilot project and will have great replication potential. It will demonstrate best agro forestry practices with carbon credits for replication both within and outside India and would provide both local and global benefits.

A brief of the project can also be seen on the website of BioCF at http://carbonfinance.org/biocarbon/router.cfm?Page=html/IndiaRuralLivelihoods.htm.

VEDA Mutually Aided Cooperative Society Ltd  has incorporated a company called  VEDA Climate Change Solutions Ltd., to focus  exclusively on Clean Development Mechanism (CDM) as suggested by the  World Bank’s Bio Carbon Fund to address issues related to carbon trading.  Veda Climate Change Solutions Limited is in touch with several project developers and Government departments/institutions to provide support  to hand holding up to receipt of CER's based on the reputation and capacity built in CDM field.

Chronology of events: