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M. Ramesh

Chennai, July 14 IDBI Bank has tied up with Sumitomo of Japan for trading in carbon credits, the bank’s Executive Director, Mr Pradip Roy, said on Saturday.

Speaking to Business Line on the sidelines of a seminar here, Mr Roy said that IFC and Sumitomo would help find buyers in various geographies.

This is at least the fourth tie-up the bank has entered into for trading in carbon credits. Earlier, in October 2006, IDBI Bank had tied up with MITCON Consultancy Services Ltd of Pune.

MITCON has expertise in project identification and registration of clean development mechanism (CDM) projects with the United Nations Framework Convention on Climate Change.

Under this arrangement, companies could get single-point assistance pertaining to origination and implementation of CDM projects, as well as advisory services on generation and trading of carbon emission reductions (CERs).

The bank followed it up with similar tie-ups with KfW, the Germany-based development finance agency, and IFC, Washington. And now recently, it has sewn up another arrangement with Sumitomo.

These tie-ups will not only assist Indian companies, both large and small, which want to undertake CDM projects, but also help boost their bottomline by selling the resultant CERs forward in the global markets.

While the sale of CERs will give companies additional revenue, IDBI Bank stands to gain in the form of additional fee income.

Each tonne of CO2 emission reduction (or its equivalent) can bring in approximately Rs 200-250 as CDM revenue. Companies dealing with carbon credits, such as EcoSecurities, have estimated that Indian companies will get $40-$50 million annually.

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