LONDON – Bank of America Merrill Lynch is pleased to announce a multimillion dollar CER (Certified Emissions Reductions) financing agreement with CleanStar Mozambique (www.cleanstarmozambique.com), a joint venture between CleanStar Ventures and Novozymes, a global leader in bioinnovation. CleanStar Mozambique is an integrated food, energy and forest protection business which retails clean cook stoves and bottled liquid cooking fuel to low-income households in Mozambique’s capital, Maputo, as a safe and affordable alternative to charcoal.
Under the agreement, Bank of America Merrill Lynch has an option to purchase and market CERs (each representing a ton of CO2e reduced), all of which will be generated in Mozambique and other least developed countries in sub-Saharan Africa through displacement of charcoal with clean cooking fuel. CERs can be used by the thousands of liable entities with emission reduction obligations under mandatory cap-and-trade programs such as the EU Emissions Trading Scheme and the Australian Carbon Pricing Mechanism. The carbon finance and revenues received by CleanStar will be used to subsidize the upfront cost and ongoing warranty for the clean cook stoves, technology that would otherwise be too expensive for low-income African consumers.
CleanStar Mozambique’s first integrated food and cooking fuel production facility is currently being built in central Mozambique in partnership with ICM, Inc., of the United States. The facility will process agricultural surpluses procured from a growing network of small-scale farmers, who are adopting a climate-smart agroforestry system developed by CleanStar Mozambique to sustainably boost local food production, income levels, and resilience, while rehabilitating degraded soils and enhancing biodiversity. CleanStar’s facility will process surplus cassava into an ethanol-based cooking fuel, and surplus legumes and grains into fortified flour, animal feed, cooking oil and other packaged products.
CleanStar Mozambique’s approach simultaneously tackles five key issues in sub-Saharan Africa: energy access, rural development, food and nutrition security, deforestation, and the potential health problems arising from indoor charcoal combustion.
“In the past few years, we’ve analysed dozens of clean cook stove ventures with a view to providing carbon financing. CleanStar’s business was a standout to us because they have addressed the shortcomings of other attempts to scale-up distribution of stoves, most of which have focused on rural populations and on energy efficiency instead of fuel substitution,” said Abyd Karmali, global head of Carbon Markets at Bank of America Merrill Lynch. “The stove distribution plan marries community-level engagement with leading-edge approaches to deploying consumer products at the base of the pyramid in emerging markets, whilst implementing climate-smart agriculture systems on degraded lands to secure a sustainable and cost-effective supply of clean cooking fuel.”
“We are very pleased to have the opportunity to partner with Bank of America Merrill Lynch, who we selected after a competitive process involving dozens of carbon market participants. Their team has demonstrated a strong understanding of and commitment to this venture, and brings the right combination of vision, capability and finance. We welcome Bank of America Merrill Lynch to the growing coalition of multinational companies joining CleanStar in our efforts to use urban African demand for food and cooking fuel as a positive force for the environment and for rural communities.” said Greg Murray, Chairman of CleanStar Mozambique.
“Having Bank of America Merrill Lynch on board is extremely positive and underscores the important role that carbon finance can play in transferring advanced technologies to least developed countries,” said Thomas Nagy, Executive Vice President at Novozymes. “This project will meet demand for quality food products and clean cooking fuel in one of the most impoverished countries of the world and we are proud to see the growing momentum in our venture.”
About Bank of America’s Environmental Commitment
Understanding the important role it plays in helping clients and communities address resource efficiency and environmental change, Bank of America has established itself as an environmental leader in the financial services sector. In 2007, Bank of America embarked on a 10-year, $20 billion business initiative to address climate change through lending, investments, capital markets activity, philanthropy, and its own operations. Delivering more than $13.1 billion in four years to hundreds of clients across the U.S. and Canada and markets across Asia, Europe and Latin America, Bank of America is focused on reducing its environmental footprint while aligning its global financial products and services to help advance energy efficiency and low-carbon energy markets, including wind, solar, biomass and other emerging technologies.
About Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 58 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,750 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
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