Transformative Carbon Asset Facility (TCAF)
The Transformative Carbon Asset Facility will help developing countries implement their plans to cut emissions by working with them to create new classes of carbon assets associated with reduced greenhouse gas emission reductions, including those achieved through policy actions. The facility will measure and pay for emission cuts in large scale programs in areas like renewable energy, transport, energy efficiency, solid waste management, and low carbon cities.
- TCAF will assist countries to implement market-based carbon pricing and sectoral mitigation measures in the emitting sectors of these countries’ economies.
- TCAF will leverage public finance through these programs to create favorable conditions for private sector investment in low-carbon technologies, provide blueprints for efficient and low-cost mitigation (globally and at scale), and achieve lasting transformational impact.
- TCAF’s efforts will inform the international process established in Paris to develop standards and agreements for future carbon crediting instruments and transfer of mitigation assets.
- TCAF will test various methods to transparently transfer “mitigation outcomes” between parties and to provide stringent accounting and transparency, thereby ensuring the environmental integrity of the assets.
- Identification: Programs that align with the objectives of the Facility are identified and the Trustee will prepare a preliminary Program Information Note (pre-PIN). If moved into the preparation phase by the World Bank, the implementing entity will develop the Program Information Note (PIN) that explains how the identified program meets eligibility criteria on technology and sector and is designed to meet the six guiding principles
- Preparation: the implementing agency will prepare a series of studies and plans. Concurrently, the TCAF team will provide policy and project advice, directly or through external consultant(s), along with financial assistance to the implementing entity to have broad internal consultation(s) and develop a Program Design Document that provides details on the technical and institutional “building blocks” required for the crediting program.
- Appraisal: The World Bank GP team will prepare a draft Project Appraisal Document (PAD) to conclude whether the project meets requirements. A decision meeting, chaired by the CMU, will make a decision for appraisal. Upon completion of satisfactory appraisal, the project will be reviewed and authorized by the World Bank Board negotiation and signing of loan agreement.
- Implementation and supervision: The World Bank will supervise the crediting program implementation as per its policies and guidelines, reporting on implementation progress on a regular basis. As provided by the ERPA and the methodological approach developed for each program, emission reductions will be independently verified on a pre-determined schedule and payments will be made to the implementing entities.
Find additional information on the application process here. Review Facility core parameters here.
Initial commitment of USD 250 million (2016), and target of USD 500 million.
For large scale renewables such as geothermal, the preparation, construction and commissioning could take four to five years. For industrial and residential energy efficiency programs, the lead time to emission reductions generation is shorter, likely two to three years.