Vitol buys ICECAP's Kyoto carbon offset portfolio
LONDON, April 28 (Reuters) - Swiss-based oil trader Vitol has bought up the remaining share of a clean energy project portfolio it co-owned with developers ICECAP Ltd., sources close to the deal said on Tuesday.
"It was simply a portfolio, a joint venture with Vitol, that was bought out by Vitol," said one source who declined to be named.
Neither Vitol nor UK-based ICECAP would confirm the deal but another source who requested anonymity said the portfolio consisted of between 10-20 U.N.-registered projects in China, a majority of which were hydro dams.
Under the Kyoto Protocol climate change pact, developers like ICECAP can invest in clean energy projects in emerging countries under the $32 billion Clean Development Mechanism (CDM) scheme.
In return, developers receive carbon offsets called Certified Emissions Reductions (CERs) from the United Nations which can be sold to investors like Vitol.
The number of CERs to be generated by the portfolio before 2012, the year Kyoto expires, was unclear but U.N. data showed it could be more than 10 million tonnes of avoided carbon dioxide.
Benchmark CERs for delivery in December CEREZ9 were trading at 11.40 euros ($14.84) a tonne on Tuesday.
The deal has also resulted in the departure of at least two ICECAP employees involved in project origination, a third source said. Sources said ICECAP will continue to manage its 15 million CER fund, called the ICECAP Carbon Portfolio fund, which boasts clients including Italy's Enel Trade SpA (ENEI.MI), Greece's Public Power Corporation (DEHr.AT) and Japan's Marubeni Corporation (8002.T).
"In terms of what it means for ICECAP ... nothing really has changed. They still have the ongoing responsibilities under the fund (and) it still has a large portfolio of projects," the first source said, adding that ICECAP will continue to originate CDM projects.
"There are still origination requirements in that fund. Initial volume projections on projects can fluctuate and therefore there can often be an ongoing requirement to continually originate projects."
Vitol's Chief Executive Ian Taylor said in March it will expand into natural gas, carbon emissions, and coal markets. [ID:nLO410484] (Additional reporting by Jackie Cowhig; Editing by Peter Blackburn)
Vitol is really on the move, definitely a company to watch closely. I also subscribe to VitolNews,blogspot.com for info. Also, I enjoyed Vitol CEO Mike Loya's appearance on Focus Washington.
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