RED.L Regulatory News (RED)

8 Nov 2006 07:09

Camco International Ltd08 November 2006 Camco signs carbon credit sales contract for one of China's largest CDM energy efficiency projects Camco's principal carbon credit volumes exceed 21m tonnes Camco International Limited ('Camco') is a leading player in the origination,co-development, placement and management of carbon credits under the KyotoProtocol. Camco is pleased to announce: • The successful commercialisation of an energy efficiency project in China,expected to generate 12.3m tonnes of carbon credits for the project, making itone of the largest energy efficiency projects ever developed under the KyotoProtocol; and • Camco now owns rights to acquire 21m tonnes of carbon credits at nil or lowcost. Carbon Credit Sales Contract signed for one of China's largest CDM energyefficiency projects Camco has successfully facilitated an Emissions Reduction Purchase Agreement("ERPA") for the commercialisation of carbon credits for the Jinan Iron andSteel Group Corporation in China. The project, which has now been reclassifiedfrom term sheet stage to ERPA stage, is expected to produce 12.3m tonnes ofcarbon credits from 2007 to the end of 2012. The project is one of the largest Clean Development Mechanism ("CDM") energyefficiency projects developed in China and reduces greenhouse gas emissionsthrough the capture and utilisation of waste gasses from steelworks. Camco haspartnered with the Jinan Iron and Steel Group Corporation, one of China'slargest steel producers, to initiate and successfully navigate the entire CDMprocess. Camco will assist them in securing the final validation report, projectregistration and ensure the delivery of carbon credits by continuous monitoringof the project throughout the duration of the ERPA. Camco International CEO, Tristan Fischer, said: "The Jinan Iron and Steel Group Corporation project is an exciting project forCamco and highlights our commitment to improving energy efficiency in China. TheERPA signing is an important milestone as it highlights Camco's ability tosuccessfully commercialise the carbon credits in our portfolio, for the benefitof our partners." Principal carbon credit volumes exceed 21m tonnes Camco's current portfolio of projects that are being developed with its partnersnow stands at 100.3m tonnes, 17.5m tonnes of which now have ERPAs in place witha further 20.9m tonnes under term sheet. As compensation for its origination, development and commercialisation services,Camco receives a financial return from the projects in its portfolio in one oftwo ways: • A "carbon share" arrangement whereby Camco has rights to a certain proportionof the carbon credits generated from a project at no cost or low cost; or• A "revenue share" arrangement whereby Camco is paid a percentage of the totalrevenues from the sale of carbon credits. Over two thirds of Camco's portfolio has been contracted as carbon share withthe balance as revenue share. Of the carbon share portion of the 100.3m tonne contracted portfolio Camcocurrently has rights to 21m Certified Emission Reductions ("CER") for its ownaccount. Camco's reporting policy is to continue to maintain a conservative outlook oncarbon credit volumes and to pro-actively monitor and adjust the estimatedcarbon credit in its portfolio to take account of project delays, changes inscope or other impacts. As a result, Camco has disclosed in its last two tradingupdates to the market the reclassification of 10.7m tonnes since the IPO inApril 2006. Under the CDM, projects have either a seven or ten year lifespan, which may berenewed. Camco's policy is only to report carbon credits that are expected to beproduced up to the end of the 1st Kyoto Commitment Period, which ends on the 31December 2012. This has two main effects: first, Camco does not report carboncredits that are produced post 2012 from projects that were designed to producecarbon credits post 2012. Second, as projects have either a seven or ten yearlifespan, if a project is delayed the carbon credits will simply be generated ata later stage. In the event that the carbon credits are produced post 2012,Camco will not include those tonnes in its reporting. Camco's projects come from a range of countries and technologies. It hasprojects contracted and under development in 7 countries, being China (83%),Russia (12%) and Kenya, Bulgaria, Latvia, Romania and Poland (5%). Camco's current portfolio of projects use 13 different technologies includingvarious energy efficiency projects (54%), methane destruction and energyproduction from coal bed and coal mine methane (25%), several renewable energytechnologies (12%), the utilisation of waste heat in cement production plants(7%), and other technologies (2%). For further information please contact:Camco International Limited +44 (0) 20 7256 7979Tristan Fischer, Chief Executive OfficerScott McGregor, Chief Financial Officer PRESSGavin Anderson +44 (0) 20 7554 1400Ken CroninJanine Brewis ABOUT CAMCO: Camco is a leading player in the origination, co-development, placement andmanagement of carbon credits under the Kyoto Protocol. Camco works with industrial companies and utilities to identify and developgreenhouse gas emission reduction projects, managing the entire process fromproject initiation to carbon credit delivery. Camco helps maximise the volume ofcredits produced and facilitate their placement with purchasers in theinternational carbon market. This 'origination to delivery' capability provides greater clarity andmanagement of carbon credit risks, adding value to both sellers and buyersparticipating in Camco's transactions. Camco is a market leader in carbon credit origination in some of the largestpotential markets for carbon credits. Additional information is available at www.camco-international.com This information is provided by RNS The company news service from the London Stock Exchange