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Responding to Climate Change 2011

Home | Spotlight on Energy | Geo Ingenieria Exploring carbon markets in Central America

Exploring carbon markets in Central America

Geo Ingenieria

Amayo Wind Power Project - Nicaragua
Amayo Wind Power Project - Nicaragua
Geo Ingeniería is an engineering consulting company specialising in renewable energy and climate change projects. It has 20 years experience in the renewable energy market, and a wide range of engineering consulting and administration services for local and international developers, from hydro and wind power stations to landfill use projects, reforestation
and biomass.

Although carbon schemes are relatively recent developments, achievements are starting to show in Central America. Geo Ingeniería, a consultancy based in Costa Rica, discusses two CDM (Clean Development Mechanism) projects, their returns in carbon credits and social benefits.

One of the most remarkable is the Amayo Wind Farm; a 40MW power station in Rivas, Nicaragua, run by a consortium of global companies. It is the country’s first wind project and currently one of the largest in Central America. Its Phase II project will add 23.1MW of power, resulting in total output of 63.0MW of installed capacity.

The project offers a very competitive energy price, while reducing the grid’s dependency on imported fuels. Moreover, the use of indigenous resources and state-of-the-art technology combined with a pool of specially-trained, local workers is a sound example of technology transfer from a developed country to a nation under development.

It is partly financed from incentives arising from the CDM registration; this meant credits gained from the project’s reduction of CO2 could then be sold across carbon markets. Furthermore, because of the multiple positive effects on Nicaragua and the Rivas region, the project has acquired Gold Standard status, a certification issued to projects with important contributions to the country’s sustainable development.

Both CDM registration and Gold Standard certification were possible with the aid of Geo Ingeniería, who provided key support throughout the project’s carbon cycle, from design to registration, implementation and emission reductions monitoring. Amayo is an excellent case study of how private initiatives, with proper involvement from local communities, enterprises and governments, can exemplify sustainable development in action.

Other private and public initiatives are now considering incentives schemes under CDM or similar ones from the voluntary market. This include a set of mini run-of-river hydro stations in isolated regions in Nicaragua, biomass projects in Costa Rica and capacity additions and energy efficiency projects in El Salvador and Honduras. In all the above, Geo Ingeniería has worked closely with project developers in structuring and implementing the projects, and as a liaison between developers and carbon credit buyers.

Overlooked for generations

From a social and economical point of view, one of the most promising fields is forestation and conservation projects.

The indigenous territories in Costa Rica cover over 329,000 hectares, legally recognised by the government under the 1997 Indigenous Law. When the government demarcated and created the Indigenous Territories, a percentage of this land was already occupied by non-indigenous people. Although the state assumed the obligation of indemnifying and displacing those occupants, it failed to comply with the law’s provisions.

In view of this, the indigenous communities sought funding themselves to pay for the costs related with the application of the law by, using recovered land for reforestation and afforestation projects. The potential CO2 stored in the 24 indigenous territories amounts to 136,675,832 tCO2, fixed in a total area of 191,000 hectares of non-intervened dense forest.

The money from the sale of the certified fixed carbon will be used for the reforestation process (carried out by the indigenous people), to pay for the land to non indigenous, for the development of infrastructure in each of the regions (housing, schools, water and healthcare, and for any necessary auditing). This is a small example of a creative mean to bring wealth to areas and people abandoned by generations.

If you are an investor or a project developer interested to learn more about any of these projects or the way you can participate in similar ones, please contact Geo Ingeniería at: [email protected].

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Geo Ingenieria

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